Skill and Foreign Firm Premium: The Role of Technology Gap and Labor Cost


Saglam B. B. , SAYEK BÖKE S.

INDUSTRIAL DYNAMICS, INNOVATION POLICY, AND ECONOMIC GROWTH THROUGH TECHNOLOGICAL ADVANCEMENTS, ss.185-215, 2013 (SSCI İndekslerine Giren Dergi) identifier

  • Yayın Türü: Makale / Tam Makale
  • Cilt numarası:
  • Basım Tarihi: 2013
  • Doi Numarası: 10.4018/978-1-4666-1978-4.ch010
  • Dergi Adı: INDUSTRIAL DYNAMICS, INNOVATION POLICY, AND ECONOMIC GROWTH THROUGH TECHNOLOGICAL ADVANCEMENTS
  • Sayfa Sayıları: ss.185-215

Özet

In this chapter, the authors construct a model that allows for joint discussion of foreign firm and skill premium in wages, and their evolution upon increased foreign firm activities. They allow for (1) dynamic interaction between the domestic and foreign firms in the labor market, via a two-sided search model, (2) technology differentials between domestic and foreign firms, and (3) varying cost of doing business between domestic and foreign firms. Analytical and numerical results point to the importance of modeling all three features. Both the level and the changes in the relative wages depend on the productivity differential (technology gap) and the job creation costs.