Is it the wage premium that targets worker turnovers?. Issue 11 (25th June 2018)

• Record Type: Journal Article
• Authors: Banerjee, Tannista; Nayak, Arnab
• Is Part Of: Applied economics letters. Volume 25:Issue 11(2018)
• Page Start: 796
• Page End: 799
• Publication Date: 2018-06-25
• Subjects: Multinational enterprises -- workers -- wages -- stocks; F23 -- L13 -- O38; Economics -- Periodicals; Economics, Mathematical -- Periodicals; 330
• DOI: 10.1080/13504851.2017.1366638
• Languages: English
• ISSNs: 1350-4851

Abstract

ABSTRACT: The literature on FDI shows that there exists a wage premium that multinational enterprises (MNEs) pay to local workers and link this to a technology spillover argument. The MNEs pay higher wages to prevent worker turnovers and technology leakages. Literature relates the wage premium aspect of FDI using worker mobility data and uses worker turnovers and the technology spillover argument. We relate stock options in the FDI context of worker mobility and find in a simplified framework that the turnover of workers would depend on the relative payments of stock options.