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FOREIGN DIRECT INVESTMENT AND DOMESTIC WAGES IN THE USA*
Author(s) -
ALHAKIMI SAIF S.,
PEOPLES JAMES
Publication year - 2009
Publication title -
the manchester school
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.361
H-Index - 42
eISSN - 1467-9957
pISSN - 1463-6786
DOI - 10.1111/j.1467-9957.2008.02086.x
Subject(s) - foreign direct investment , economics , international economics , investment (military) , labour economics , monetary economics , macroeconomics , political science , politics , law
High wages generally prevail in industries with substantial foreign direct investment (FDI) in developed countries. This study examines whether such wages are economically justified by revealing the effect of worker and industry characteristics on the FDI–domestic wage relationship. Findings show that while observed worker characteristics that command high wages help explain high FDI wages, the propensity for foreign owners to invest in capital‐intensive industries contributes appreciably to the high wage paid to workers in industries with high levels of FDI.