Influences of Foreign-Owned Enterprises on Domestic Wage: The Case of Vietnam
Keywords:
Foreign-owned enterprise, backward linkage, forward linkage, wageAbstract
This research investigates the influences of foreign-owned enterprises on the
domestic wage and labor market in Vietnam, employing data of Vietnam Enterprise
Surveys for the period 2010-2018. The regression results indicate that foreign-owned
enterprises’ operations have an effect on increasing domestic wages through backward
linkage, while the impact through forward linkage is negative. The analysis of the wage
and employment characteristics of foreign-owned enterprises in Vietnam indicates a
concern regarding job security and sustainability. Foreign-owned enterprises,
concentrating mainly in labor-intensive industries, tend to employ younger workers with
shorter employment spells. Therefore, the paper recommends that policymakers should
pay more attention to labor relations in foreign-owned enterprises and promote policies
that enhance the competitiveness and resilience of domestic firms.
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