TY  - JOUR
AU  - Lipsey,Robert E.
AU  - Sjoholm,Fredrik
TI  - Foreign Direct Investment and Wages in Indonesian Manufacturing
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 8299
PY  - 2001
Y2  - May 2001
UR  - http://www.nber.org/papers/w8299
L1  - http://www.nber.org/papers/w8299.pdf
N1  - Author contact info:
Robert E. Lipsey
NBER
365 Fifth Avenue, Suite 5318
New York, NY 10016-4309
Tel: 212/817-7961
Fax: 212/817-1597
E-Mail: N/A user is deceased

Fredrik Sjoholm
Research Institute of Industrial Economics
Box 55665
SE-102 15
Stockholm, Sweden
E-Mail: Fredrik.Sjoholm@ifn.se
AB  - This paper asks two types of questions. One is about the behavior of foreign-owned firms in Indonesian labor markets and the other is about the effect of the presence of foreign-owned firms on Indonesian wages. We ask first whether foreign-owned plants pay a higher price for labor, that is, more than locally-owned plants for workers of a given quality, as we can measure it. We then ask whether foreign-owned plants pay a higher price for labor given the characteristics of the plants such as their size, industry, and location. The answer is that foreign firms do pay a higher price, and even a higher price given their plant characteristics. The second set of questions is whether a larger presence of foreign-owned plants results in higher wages in locally-owned plants and overall. Higher foreign presence leads to higher wages in locally-owned plants. Since the foreign plants also pay higher wages than locally-owned ones, the two factors together mean that higher foreign presence raises the general wage level in a province and industry.
ER  -