Wage spillovers in Indian manufacturing

Publication Type:

Journal Articles


The Singapore Economic Review, World Scientific Publishing Company, Volume 57, Number 1, p.1250006 –1-1250006 -19 (2012)




Domestic firms, Foreign firms, wage spillovers


The presence of foreign firms might lead to movement of skilled labor from domestic firms. To prevent such movement, domestic firms could increase their wages. Also, productivity spillovers from foreign firms may increase the productivity of domestic firms and possibly the wages given in domestic firms. In this paper, we try to answer whether the wages offered by domestic firms to their labor is affected by the presence of foreign firms. We carry out our analysis for an unbalanced firm-level panel dataset for 6 two-digit industries in Indian manufacturing. We find some evidence for positive wage spillover in three industries.


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