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Does export participation affect wages and employment quality? the case of Vietnamese SMEs

Vu, Van Huong (2012): Does export participation affect wages and employment quality? the case of Vietnamese SMEs.

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Abstract

Based on a unique matched firm-worker panel dataset between 2007 and 2009, empirical results show that export participation has a positive impact on wages when taking account of firm characteristics alone. However, exporter wage premium completely vanishes when both firm and worker characteristics are added simultaneously. This finding is also confirmed when controlling for time-invariant unobservable factors by spell fixed effect estimations. Furthermore, using a firm level balanced panel dataset in the same periods, the hypothesis of the positive role of export status on employment quality is rejected when it has a positive effect on the share of casual workers. However, this result is not robust across sectors and locations. Export participation continues to yield a positive impact on the share of casual worker in low tech sectors. However, a negative effect on employment quality is observed in high tech industries. The findings suggest that policies encouraging and supporting exporting should not only focus on the amount of employment created but also on the quality of employment, especially for low technology industries.

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