Heterogeneous Firms in International Markets and Gender Inequalities: New Evidence from Vietnam

Abstract

ABSTRACT Recent contributions in international economics have highlighted structural differences between firms actively participating in global markets and firms mostly operating in the domestic economy. Using firm-level data from Vietnam, this study found that foreign and domestic firms with global ties – exporters, multinational enterprises (MNEs), and domestic firms belonging to global value chains (GVCs) – play an important role in reducing gendered differences in employment opportunities in the formal sector, in particular for low-skilled women workers. Women workers are more likely than men workers to be employed in low-wage firms, but this gender gap is lower in MNEs, in particular those belonging to GVCs. This study provides evidence of important within-sector heterogeneity not only based on firms’ ownership but also on the intensity of participation in GVCs. HIGHLIGHTS Global economic interactions can shape gender inequalities in the labor markets of developing countries. In Vietnam, firms with complex global networks promote a more gender-balanced development trajectory. Foreign and domestic firms participating in global value chains boost employment opportunities but mostly for low-skilled women. Firms’ participation in international markets has limited effects on the reduction of gender inequality in wages.