Labor productivity, wages, nationality, and foreign ownership shares in Thai manufacturing, 1996–2000

Abstract

This paper compares labor productivity and wages among nationality and ownership groups of foreign multinational corporations (MNCs) and local plants in Thai manufacturing for 1996, 1998, and 2000. Disaggregating foreign MNCs by nationality or foreign ownership share revealed a few significant differences in both labor productivity and wages that were not present in more aggregate specifications. In these cases, there was a weak tendency for MNCs from Europe, Japan, and the United States to have relatively high labor productivity and wages, for wholly-foreign MNCs to have relatively high labor productivity, and for majority- and wholly-foreign MNCs to pay relatively high wages. However, these results suggest that the relationships among labor productivity or wages, on the one hand, and nationality or foreign ownership shares, on the other hand, were generally weak in Thai manufacturing. These results are also consistent with those of previous studies in suggesting that the relationship between labor productivity and foreign ownership in general was also rather weak, though the relationship between wages and foreign ownership was somewhat stronger.