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The Effect of Foreign Affiliate Employment on Wages, Employment, and the Wage Share in Austria

The Effect of Foreign Affiliate Employment on Wages, Employment, and the Wage Share in Austria This paper estimates the effects of outward Foreign Direct Investment (employment in affiliates abroad) on employment, wages and the wage share in Austria using panel data for the period 1996–2005. There is evidence of significant negative effects of FDI on both employment and wages, and consequently on the wage share. The results are not limited to workers in low-skilled sectors. The negative employment effect is mainly due to the rise in employment in the foreign affiliates in Eastern Europe. The negative wage effects originate from affiliate employment in both Eastern Europe and the developed countries in the industrial sector, but FDI in Eastern Europe has positive wage effects in the services sector due to possible scope effects. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Review of Political Economy Taylor & Francis

The Effect of Foreign Affiliate Employment on Wages, Employment, and the Wage Share in Austria

Review of Political Economy , Volume 24 (2): 21 – Apr 1, 2012
21 pages

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References (137)

Publisher
Taylor & Francis
Copyright
Copyright Taylor & Francis Group, LLC
ISSN
1465-3982
eISSN
0953-8259
DOI
10.1080/09538259.2012.664335
Publisher site
See Article on Publisher Site

Abstract

This paper estimates the effects of outward Foreign Direct Investment (employment in affiliates abroad) on employment, wages and the wage share in Austria using panel data for the period 1996–2005. There is evidence of significant negative effects of FDI on both employment and wages, and consequently on the wage share. The results are not limited to workers in low-skilled sectors. The negative employment effect is mainly due to the rise in employment in the foreign affiliates in Eastern Europe. The negative wage effects originate from affiliate employment in both Eastern Europe and the developed countries in the industrial sector, but FDI in Eastern Europe has positive wage effects in the services sector due to possible scope effects.

Journal

Review of Political EconomyTaylor & Francis

Published: Apr 1, 2012

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