This paper examines the impact of FDI on wages paid by domestic firms in
Vietnam. The existing literature has examined the impact of foreign firms on domestic
firms’ wage levels within an industry. We expand on the literature by examining interindustry
linkages as an additional conduit for wage spillovers. There is strong evidence of
horizontal wage spillovers from foreign firms to domestic firms in Vietnam, despite
different labour market conditions and firms’ characteristics. Vertical wage spillovers
exist, but depend on the specific characteristics of firms and industries. A further finding
is that training activities facilitate wage spillovers.