PUBLICATIONS & REPORTS

PUBLICATIONS & REPORTS

Wages and Worker Quality in Foreign Multinationals and Local Manufacturing Plants in Indonesia and Malaysia

Author Eric D. Ramstetter
Affiliation The International Centre for the Study of East Asian Development,Kitakyushu
Date of Publication 2014.3
No. 2013-03
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Contents Introduction

This report is the first from a multi-year project examining how multinational enterprises (MNEs) affect wages and human resource development in Asia’s large developing economies. This report focuses on Indonesia and Malaysia because detailed information on the educational background of workers and export propensities (the share of exports in sales) in manufacturing plants allows relatively rigorous comparisons of MNEs and local plants.2 Because data on worker education are available, the most sophisticated, previous studies of wage differentials between MNEs and local plants examined medium-large (20 or more workers) foreign multinational enterprises (MNEs) and local, private plants in Indonesian manufacturing in 1996.