abstract: 'Purpose The last two decades have been characterised by a rise in income

  and wage inequality in a wide range of countries, including European

  transition countries. The rise in globalisation is one major factor

  explaining this increasing wage inequality. International trade and FDI

  have increased significantly since the beginning of transition and the

  purpose of this paper is to focus on whether FDI plays an important role

  in explaining the pattern of wage inequality in selected transition

  countries.

  Design/methodology/approach A cross-country empirical investigation has

  been conducted using two alternative measures of wage inequality: the

  Gini coefficient and the Theil index. Several model specifications and

  estimation strategies have been employed to obtain consistent estimates

  and to check for the robustness of the results.

  Findings The results indicate that a rising share of inward FDI in gross

  domestic product (GDP) increased wage inequality in transition

  economies, though its overall effect was relatively small. Considering

  the long run, there is no clear evidence of a concave relationship

  between FDI and wage inequality, which may be a consequence of the

  relatively low levels of FDI in many transition countries.

  Practical implications Inwards FDI has made a small contribution to

  increasing wage inequality in European transition economies. However,

  its overall beneficial effects on labour markets in these countries

  suggest that rather than restricting FDI governments should target

  increasing the supply of skilled labour.

  Originality/value This new empirical evidence supports the hypothesis

  that an increased inward FDI stock as a share of GDP increases wage

  inequality in transition economies, however, this relationship is a

  complex one. Differences in average wages, wage differentials,

  employment shares of skilled workers and relative size of the

  foreign-owned sector are all likely to be important for the behaviour of

  wage inequality.'
affiliation: 'Alili, MZ (Corresponding Author), South East European Univ, Fac Publ
  Adm \& Polit Sci, Tetovo, North Macedonia.

  Alili, Merita Zulfiu, South East European Univ, Fac Publ Adm \& Polit Sci, Tetovo,
  North Macedonia.

  Adnett, Nick, Staffordshire Univ, Sch Business Leadership \& Econ, Stoke On Trent,
  Staffs, England.'
author: Alili, Merita Zulfiu and Adnett, Nick
author-email: 'm.zulfiu@seeu.edu.mk

  N.J.Adnett@staffs.ac.uk'
author_list:
- family: Alili
  given: Merita Zulfiu
- family: Adnett
  given: Nick
da: '2023-09-28'
doi: 10.1108/IJSE-09-2017-0373
eissn: 1758-6712
files: []
issn: 0306-8293
journal: INTERNATIONAL JOURNAL OF SOCIAL ECONOMICS
keywords: Foreign direct investment; Transition economies; Wage inequality
keywords-plus: 'UNIT-ROOT TESTS; FOREIGN DIRECT-INVESTMENT; PANEL-DATA; INCOME

  INEQUALITY; LABOR REALLOCATION; DETERMINANTS; EMPLOYMENT'
language: English
number: '9'
number-of-cited-references: '70'
orcid-numbers: Alili, Merita Zulfiu/0000-0002-6367-6193
pages: 1283-1304
papis_id: 4e646ca3529c4c368fbbb6d18465cd6b
ref: Alili2018didfdi
researcherid-numbers: Alili, Merita Zulfiu/B-2953-2016
times-cited: '10'
title: Did FDI increase wage inequality in transition economies?
type: Article
unique-id: WOS:000442506900002
usage-count-last-180-days: '2'
usage-count-since-2013: '15'
volume: '45'
web-of-science-categories: Economics
year: '2018'