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- W2107452803 abstract "Quite a few studies have documented the finding that foreign-owned and/or large firms pay higher wages. A number of papers have argued for a worker-learning model, in which workers learn more in foreign or large firms, though there is little supporting theory on exactly how this mechanism operates. Second, it may be that foreign and large firms select better workers on average. A theoretical paper by Yeaple (2005) develops this idea in a model with heterogeneous workers and ex-ante homogeneous firms. In this paper, we develop a theoretical model that combines the approaches and allows each as a special case. Some of the empirical implications of the two approaches, which are by no means mutually exclusive, are essentially identical and a few are different. We then conduct an empirical investigation using matched employeremployee data from Denmark. Our results suggest that, of the wage premium in large firms, about 30 percent is explained by observed and unobserved worker characteristics, with the other 70 percent consistent with the worker-learning model. Higher wage growth in large firms and higher wages for workers with more experience and tenure in large plants also support the worker-learning model. Some of the foreign-firm wage premium and all of the wage-growth premium disappears when controlling for firm size, a finding consistent with our model." @default.
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- W2107452803 date "2008-01-01" @default.
- W2107452803 modified "2023-09-26" @default.
- W2107452803 title "Large Firms, Foreign Firms, and Domestic Wages" @default.
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