Foreign- and domestic firm ownership and its impact on wages. Evidence from Poland

Abstract

This study concentrates on the effect of foreign ownership of companies on worker wage distribution. Using an innovative methodological approach that combines the Oaxaca–Blinder decomposition and the modified DiNardo et al. reweighting approach, we estimate the wage gap between domestic-owned and foreign-owned firms. The study confirms that firm ownership (domestic or foreign) influences the wage distribution of workers, as a worker employed in a foreign-owned firm earns, on average, 5 percent more than a matched worker in a domestic-owned firm with similar characteristics. We link that gap with an origin of foreign capital. This analysis demonstrates that the origin of capital has an impact on wage distribution in the firm and may affect wages in the whole section.