Is it the wage premium that targets worker turnovers?

ABSTRACT

The literature on FDI shows that there exists a wage premium that multinational enterprises (MNEs) pay to local workers and link this to a technology spillover argument. The MNEs pay higher wages to prevent worker turnovers and technology leakages. Literature relates the wage premium aspect of FDI using worker mobility data and uses worker turnovers and the technology spillover argument. We relate stock options in the FDI context of worker mobility and find in a simplified framework that the turnover of workers would depend on the relative payments of stock options.

KEYWORDS:

• Multinational enterprises
• workers
• wages
• stocks

JEL CLASSIFICATION:

• F23
• L13
• O38

Disclosure statement

No potential conflict of interest was reported by the authors.