Do Transnational Corporations pay Higher Wages? | tutor2u Economics
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Do Transnational Corporations pay Higher Wages?

Here is some new research relevant to the debate over the benefits and costs of foreign direct investment in both lower, middle and higher income countries.

The study looks at wage premiums in the Japanese economy.

"Firms that engage in international markets tend to pay higher wages. Compared with the purely domestic firms, the average wage premiums for Japanese multinational firms and foreign-owned firms are 59.2% and 74.2%, respectively" 

Typically exporting businesses are larger and can enjoy increased profitability from internal economies of scale.

And transnational corporations may also be more successful in attracting and employing the higher skilled domestic workers to do jobs that require stronger levels of human capital than businesses operating solely in domestic sectors - the report finds that "worker characteristics such as experience and education also play an important role and account for approximately 13%-20% of the wage premiums"

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