We owe special thanks to Cesare Imbriani for providing us with constructive comments and suggestions. Any errors or omissions remain the responsibility of the authors.
Do Multinational Enterprises Push up the Wages of Domestic Firms in the Italian Manufacturing Sector?*
Article first published online: 9 JUL 2014
© 2014 The University of Manchester and John Wiley & Sons Ltd
The Manchester School
How to Cite
Pittiglio, R., Reganati, F. and Sica, E. (2014), Do Multinational Enterprises Push up the Wages of Domestic Firms in the Italian Manufacturing Sector?*. The Manchester School. doi: 10.1111/manc.12076
- Article first published online: 9 JUL 2014
- Manuscript Accepted: 12 MAY 2014
- Manuscript Received: 19 SEP 2012
This paper investigates the impact of incoming foreign direct investment on local wages in the Italian manufacturing sector. We find that wage spillovers take place mainly when the technological gap between domestically owned firms and foreign-owned firms is large. Specifically, a large technological distance between domestically owned and foreign-owned firms has positive effects on wages paid by domestically owned firms in the same industry and negative on domestic wages in upstream and/or in downstream industries. Finally, inward investment may indeed improve the domestic sectors, although such linkage depends on different characteristics of domestically owned firms and sectors where firms operate.