Co-location and spatial wage spillovers in China: The role of foreign ownership and trade

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Abstract

This paper examines how wages in China are influenced by the interaction and co-location of firms across geographical space. Specifically, and with an emphasis on globally engaged firms and China’s uneven growth across regions we use a spatial econometric approach to estimate the direct and indirect impact of foreign-ownership and export participation on wages. Spatial Durbin Model results reveal an indirect effect of foreign-ownership and exporting on the compensation of workers in co-located firms as well as evidence in support of the standard direct effect that foreign firms, exporters, and firms with a highly educated workforce pay higher wages.
Original languageEnglish
Pages (from-to)629-644
Number of pages16
JournalWorld Development
Volume66
Early online date22 Oct 2014
DOIs
Publication statusPublished - Feb 2015

Keywords

  • wages
  • FDI
  • trade
  • co-location
  • China
  • spatial econometrics

ASJC Scopus subject areas

  • Economics and Econometrics
  • Development
  • Geography, Planning and Development
  • Sociology and Political Science

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