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Integration, Foreign Direct Investment and Labour Markets: Microeconomic Perspectives

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  • Gaston, Noel
  • Nelson, Douglas

Abstract

Foreign direct investment (FDI) has grown far more rapidly than trade during the last two decades. As with the other prominent features of globalization, FDI is controversial. The impact of FDI on labour markets has been of growing concern, in particular for source countries. The deterioration of labour market conditions for unskilled workers in many OECD countries during the 1980s and 1990s was a primary catalyst for the concern. With regard to its impact on labour markets, FDI may have effects that, at least in the short and medium run, may well dwarf the effects of trade and immigration. In this paper, we review the economic theories and econometric evidence which purport to explain various aspects of the impact of FDI on labour markets. The emphasis is on two partial equilibrium models which, respectively, focus on the location decisions of multinationals and the impact of global firms on collective bargaining outcomes. Copyright 2002 by Blackwell Publishers Ltd and The Victoria University of Manchester

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Bibliographic Info

Article provided by University of Manchester in its journal Manchester School.

Volume (Year): 70 (2002)
Issue (Month): 3 (June)
Pages: 420-59

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Handle: RePEc:bla:manchs:v:70:y:2002:i:3:p:420-59

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Cited by:
  1. Jim Malley & Apostolis Philippopoulos & Ulrich Woitek, 2007. "To React or Not? Fiscal Policy, Volatility and Welfare in the EU-3," Working Papers 2007_02, Business School - Economics, University of Glasgow.
  2. Fischer, Justina A.V., 2012. "The choice of domestic policies in a globalized economy: Extended Version," MPRA Paper 37816, University Library of Munich, Germany.
  3. Axel Dreher & Noel Gaston, 2006. "Has globalization increased inequality?," KOF Working papers 06-140, KOF Swiss Economic Institute, ETH Zurich.
  4. Fischer, Justina A.V., 2012. "Globalization and Political Trust," MPRA Paper 36327, University Library of Munich, Germany.
  5. Q Li & S Girma, . "Exporting, FDI, and Labour Demand Adjustment: Evidence from the UK Manufacturing," Working Papers 2006_18, Business School - Economics, University of Glasgow.
  6. Hisako KAI & Shigeyuki HAMORI, 2009. "Globalization, Financial Depth, and Inequality in Sub-Saharan Africa," Discussion Papers 0912, Graduate School of Economics, Kobe University.
  7. Fischer, Justina A.V., 2012. "The choice of domestic policies in a globalized economy," MPRA Paper 36990, University Library of Munich, Germany.

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