The role of multinational firms in the wage-gap debate

James R. Markusen, Anthony J. Venables

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69 Citations (Scopus)


The observation of an increase in the ratio of skilled to unskilled wages in the high-income countries and in some cases in low/middle-income countries has led to considerable discussion and controversy as to its cause. Virtually none of the analyses have considered a role for multinational investment in explaining the wagegap phenomenon. This paper adapts the authors' earlier work to consider what role multinationals might play in factor markets. It identifies circumstances under which investment liberalization is likely to raise the wage gap in both the skilled-labor abundant and the unskilled-labor abundant country.

Original languageEnglish
Pages (from-to)435-451
Number of pages17
JournalReview of International Economics
Issue number4
Publication statusPublished - 1997
Externally publishedYes

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