| Summary: | 碩士 === 國立中央大學 === 經濟學系 === 105 === This paper examines the effect of foreign direct investment (FDI) in Vietnamese manufacturing on wages in locally owned Indonesian manufacturing plants. We use manufacturing census data for 2000 to 2008 undertaken by the General Statistical Office (GSO) to analyze the extent of wage differentials between foreign multinational enterprises, state-owned enterprises and domestic private firms. It is difficult to distinguish the wage spillover effect when the government setting a minimum wage in distinct regions, even different rules between foreign multinational enterprises and local firms.
The impact of foreign direct investment on overall wages depends not only on how high the foreign firm wages are, but also on their effect, if any, on wages in locally owned firms. After 2007, Vietnam became as a member of the WTO and the effect of the spillover in the second district is higher. However, it has not apparently happened in the first district.
According to the degree of foreign investment in the provinces of Vietnam, the competitiveness of resources is changed, and even if the overall average salary increase, there may still be the expansion of the differences in salary within the industry, or a squeeze effect to the inefficient firms. In order to further explore whether the industry wage growth is not balanced, we inspect the direction of the influence of the salary gap in the provinces every year. We originally thought that the greater the gap meaning the salary suffers the pressure to increase, but the result was unexpectedly. The larger the gap in the province will lead to a reduction in the overall salary, indicating that even if foreign investment will pull up salary levels, "polarization" phenomenon in the province will deteriorate the overall salary level.
On the whole, relative to the state-owned enterprises, foreign investment makes a greater impact on wage spillovers in the private sector, in line with the state-owned enterprises has a stable salary appearance.
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