International journal of manpower vol:24 issue:4 pages:399-425
Using a unique three-digit firm-level data set of ad medium- and large-sized manufacturing enterprises in Bulgaria covering the years 199711998, and investigation is conducted into how wage determination is related to ownership status. Building on a slightly modified version of the right-to-manage model, the pooled OLS, panel and first-difference TSLS estimates show statistically significant differences in the share of rents taken by workers employed in state, private domestic and foreign firms. Taking account of firm heterogeneity, it is found that rent sharing is nearly non-existent in foreign-owned firms, while the level of pay is higher compared with state-owned companies. Further, rent sharing seems to be highly pronounced in state-owned enterprises, while an average domestically private-owned companies are characterised by less rent sharing. Overall, the robustness checks confirm these findings.