TITLE:
Foreign Shares, Human Capital and Wage Inequality: Evidence from Indian Manufacturing Firms
AUTHORS:
Gunja Baranwal
KEYWORDS:
Foreign Direct Investment, Human Capital, Labour Demand, Labour Supply, Wages
JOURNAL NAME:
Modern Economy,
Vol.8 No.9,
September
28,
2017
ABSTRACT: The interactions between Foreign Direct Investment
(FDI) and human capital formations have strong implications for labour demand
and supply factors in developing economies through various ways like training,
direct technological diffusion, innovation and imitation. Indian economy has
featured rising wage inequality and demographic dividend simultaneously since
the last decade. In line with the similar research, the objective of
the paper is to empirically assess this effect in Indian
manufacturing firms using unbalanced panel data for the period 2001-2015. This paper uses fixed effects panel data estimation
technique to get the estimates. The findings reflect that FDI is found out to be stirring up wage inequality
with positive relation between relative wages and interaction term
of training and FDI suggestive of positive demand side effect of FDI only
through this channel.