oa Business Management Review - Do foreign-owned firms pay higher wages than locally-owned firms? Evidence from Tanzania s manufacturing sector

Volume 11, Issue 2
  • ISSN : 0856-2253



This paper employs data from Tanzanias manufacturing sector to examine the impact of foreign-owned firms on wages. It finds that the sampled workers from foreign-owned and exporting firms have relatively higher median and mean monthly wages than workers from locally-owned firms. Using regression analysis to examine the impact of foreign-owned firms on earnings, as well as the effect of globalisation on earnings, the paper finds a positive and significant effect of foreign ownership and globalisation on the earnings of workers. The regression analysis also includes common human capital variables, and the results are not surprising; age, experience and education positively affect earnings. Other variables included in the regression are location, size and gender, and the findings are that firms that are located outside Dar es Salaam pay less than those based in the commercial capital, larger firms pay higher wages than smaller firms, and female workers face wage discrimination.

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