In a market-clearing view of wage formation it is claimed that only external factors, namely the conditions in the labor market, affect wages for a given type of labor in any one firm. However, there are several non-market-clearing theories in which importance is given also to firm-specific variables. In this article the effects of organizational factors on the wage level of the firm are studied Using a data set with several observations from each establishment, it is possible to distinguish within-establishment and between- establishment differences. Organizational factors such as establishment size, the presence of a personnel officer and managers' ownership are found to create wage differentials across establishments. The results are consistent with implications from several non- market-clearing theories.
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