Foreign direct investment and wages: does the level of ownership matter?

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Turkey has become a regional magnet for foreign direct investment (FDI) over the past two decades. In this study we show that FDI flows into the country do not benefit all recipients equally.

In particular, we find that only those firms with high levels of foreign equity participation and their skilled workers are the primary beneficiaries. This is a result of multinational companies’ desire to restrict labour turnover and preserve human capital in light of organisational changes and technology transfer.

The policy implication extends not only to relaxing foreign equity restrictions in other emerging economies, but also to creating a business environment conducive to the transfer of multinational companies’ assets.

Read the Working Paper in full (496KB - PDF)

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