PUBLICATIONS & REPORTS

Contents Introduction

This paper analyzes the wage differentials between plants belonging to foreign multinational corporations (MNCs) and plants belonging to local firms in the Thai manufacturing sector. First, this paper finds evidence of positive wage differentials between MNC plants and local plants for both non-production and production workers after controlling for other plant characteristics. The magnitude of the wage differential is larger for non-production workers than for production workers. The magnitude of the wage differentials for both types of labor are also smaller for large plants and larger for plants that import a majority of their raw materials and parts. Second, this study also finds evidence of a positive correlation between the share of output by MNC plants to total output in an industry and the wage paid by local plants in the same industry.