B. Aitken et al., WAGES AND FOREIGN OWNERSHIP - A COMPARATIVE-STUDY OF MEXICO, VENEZUELA, AND THE UNITED-STATES, Journal of international economics, 40(3-4), 1996, pp. 345-371
This paper explores the relationship between wages and foreign investm
ent in Mexico, Venezuela, and the United States. Despite very differen
t economic conditions and levels of development, we find one fact that
is robust across all three countries: higher levels of foreign invest
ment are associated with higher wages. However, in Mexico and Venezuel
a, foreign investment is associated with higher wages only for foreign
-owned firms - there is no evidence of wage spillovers leading to high
er wages for domestic firms. The lack of spillovers in Mexico and Vene
zuela is consistent with significant wage differentials between foreig
n and domestic enterprises. In the United States, where the evidence s
uggests some wage spillovers from foreign to domestic enterprises, wag
e differentials are smaller.