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The authors' work aims to identify the employer-specific drivers of the college (or university) wage gap, which has been identified as one of the major determinants of the dynamics of overall wage and income inequality in the past decades. The authors focus on three employer-level features that can be associated with asymmetries in the employment relation orientation adopted for college and non-college-educated employees: (1) size, (2) the share of standard employment and (3) the pervasiveness of incentive pay schemes.

The authors' establishment-level analysis (data from the Basic Survey on Wage Structure (BSWS), 2005–2018) focusses on Japan, an economy characterised by many unique economic and institutional features relevant to the aims of the authors' analysis. The authors use an adjusted measure of firm-specific college wage premium, which is not biased by confounding individual and establishment-level factors and reflects unobservable characteristics of employees that determine the payment of a premium. The authors' empirical methods account for the complexity of the relationships they investigate, and the authors test their baseline outcomes with econometric approaches (propensity score methods) able to address crucial identification issues related to endogeneity and reverse causality.

The authors' findings indicate that larger establishment size, a larger share of regular workers and more pervasive implementation of IPSs for college workers tend to increase the college wage gap once all observable workers, job and establishment characteristics are controlled for. This evidence corroborates the authors' hypotheses that a larger establishment size, a higher share of regular workers and a more developed set-up of performance pay schemes for college workers are associated with a better capacity of employers to attract and keep highly educated employees with unobservable characteristics that justify a wage premium above average market levels. The authors provide empirical evidence on how three relevant establishment-level characteristics shape the heterogeneity of the (adjusted) college wage observed across organisations.

The authors' contribution to the existing knowledge is threefold. First, the authors combine the economics and management/organisation literature to develop new insights that underpin the authors' testable empirical hypotheses. This enables the authors to shed light on employer-level drivers of wage differentials (size, workforce composition, implementation of performance-pay schemes) related to many structural, institutional and strategic dimensions. The second contribution lies in the authors' measure of the “adjusted” college wage gap, which is calculated on the component of individual wages that differs between observationally identical workers in the same establishment. As such, the metric captures unobservable workers' characteristics that can generate a wage premium/penalty. Third, the authors provide empirical evidence on how three relevant establishment-level characteristics shape the heterogeneity of the (adjusted) college wage observed across organisations.

We examine the determinants of multinational firms’ propensity to conduct R&D activities in host countries, with specific attention to the influence of host countries’ university research. We consider heterogeneous locational drivers related to the type of R&D activity: basic research, applied research, development for local markets, and development for global markets. Drawing on official survey data on R&D activities by 498 Japanese multinational firms in 24 host countries and estimating two-stage models, we find that the likelihood that firms conduct R&D in a host country is generally increasing in the strength of university research. Conditional on a firm’s R&D presence, university research strength is associated with a greater propensity to conduct (basic) research activities rather than (local) development, while the intensity of host country university–industry collaboration is most strongly associated with applied research. Host country experience and the depth of the firm’s manufacturing presence are also associated higher propensities to engage in research.