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Foreign Investment in the Presence of an Informal Sector

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Author Info
Chandra, Vandana
Khan, M Ali
Abstract

In the context of a segmented economy in which the urban unemployed subsist in informal-sector activities, Earl Grinols (1991) has recently questioned conventional wisdom whereby foreign investme nt with repatriated earnings is necessarily immiserizing for the host country. In this paper, the authors extend Grinols's analysis and pl ace it in a broader context, permitting richer conceptions of informal-sector activities. Their principal finding is that the original insight is surprisingly robust once Heckscher-Ohlin-Samuelson factor intensities are suitably modified and interpreted. The authors' models may also have independent inter est for other work on the informal sector. Copyright 1993 by The London School of Economics and Political Science.

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Article provided by London School of Economics and Political Science in its journal Economica.

Volume (Year): 60 (1993)
Issue (Month): 237 (February)
Pages: 79-103
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Handle: RePEc:bla:econom:v:60:y:1993:i:237:p:79-103

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  1. Chaudhuri, Sarbajit, 2008. "International Factor Mobility, Skills Formation and Welfare," MPRA Paper 9302, University Library of Munich, Germany. [Downloadable!]
  2. Titas Bandopadhyay, 2005. "Foreign Enclaves, Informal Sector And Urban Unemployment-A Theoretical Analysis," GE, Growth, Math methods 0511006, EconWPA. [Downloadable!]
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  3. Hartmut Lehmann & Norberto Pignatti, 2007. "Informal Employment Relationships and Labor Market Segmentation in Transition Economies: Evidence from Ukraine," IZA Discussion Papers 3269, Institute for the Study of Labor (IZA). [Downloadable!]
  4. Sarbajit Chaudhuri, 2005. "Foreign Capital, Welfare And Urban Unemployment In The Presence Of Agricultural Dualism," International Trade 0510010, EconWPA. [Downloadable!]
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  5. Sarbajit Chaudhuri, 2004. "Incidence of Child Labour, Free Education Policy, and Economic Liberalisation in a Developing Economy," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 43(1), pages 1-25. [Downloadable!]
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  6. Bandopadhyay, Titas Kumar, 2006. "Should informal sector be subsidised?," MPRA Paper 1775, University Library of Munich, Germany. [Downloadable!]
  7. Khan, M. Ali Khan, 2007. "The Harris-Todaro Hypothesis," MPRA Paper 2201, University Library of Munich, Germany. [Downloadable!]
  8. John Bennett & Saul Estrin, 2007. "Informality as a Stepping Stone: Entrepreneurial Entry in a Developing Economy," IZA Discussion Papers 2950, Institute for the Study of Labor (IZA). [Downloadable!]
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  9. Sarbajit Chaudhuri & Ujjaini Mukhopadhyay, 2005. "Free Education Policy And Trade Liberalization: Consequences On Child And Adult Labour Markets In A Small Open Economy," Labor and Demography 0510018, EconWPA. [Downloadable!]
  10. Titas Bandopadhyay, 2005. "On-The-Job Search, Urban Informal Sector And The Development Policies-A General Equilibrium Analysis," GE, Growth, Math methods 0511004, EconWPA. [Downloadable!]
  11. Chaudhuri, Sarbajit & Banerjee, Dibyendu, 2006. "Economic Liberalization and Informal Wage in a Small Open Economy: Does Capital Mobility count?," MPRA Paper 1353, University Library of Munich, Germany. [Downloadable!]
  12. Sarbajit Chaudhuri, 2001. "Foreign Capital Inflow, Non-traded Intermediary, Urban Unemployment, and Welfare in a Small Open Economy: A Theoretical Analysis," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 40(3), pages 225-235. [Downloadable!]
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  13. Chaudhuri, Sarbajit & Yabuuchi, Shigemi, 2007. "Foreign Capital and Skilled-unskilled Wage Inequality in a Developing Economy with Non-traded Goods," MPRA Paper 2645, University Library of Munich, Germany. [Downloadable!]
  14. Titas Bandopadhyay, 2005. "Universal Education And Its Impact On The Child And The Adult Labour Market," GE, Growth, Math methods 0511002, EconWPA. [Downloadable!]
  15. Hartmut Lehmann & Norberto Pignatti, 2008. "Informal Employment Relationships and Labor Market Segmentation in Transition Economies : Evidence from Ukraine," ESCIRRU Working Papers 3, DIW Berlin, German Institute for Economic Research. [Downloadable!]
  16. Sarbajit Chaudhuri, 2001. "Foreign Capital Inflow, Technology Transfer, and National Income," The Pakistan Development Review, Pakistan Institute of Development Economics, vol. 40(1), pages 49-56. [Downloadable!]
  17. Sarbajit Chaudhuri & Ujjaini Mukherjee, 2005. "Removal Of Protectionism, Foreign Investment And Welfare In A Model Of Informal Sector," International Trade 0511009, EconWPA. [Downloadable!]
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  18. Sarbajit Chaudhuri, 2005. "Pollution And Welfare In The Presence Of Informal Sector: Is There Any Trade-Off?," Others 0510012, EconWPA. [Downloadable!]
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