Labor Conflict and Foreign Investments: An Analysis of FDI in India
AbstractThis paper analyzes patterns of foreign direct investment in India. We investigate how labor conflict, credit constraints, and indicators of a state's economic health influence location decisions of foreign firms. We account for the possible endogeneity of labor conflict variables in modeling the location decisions of foreign firms. This is accomplished by using a state-specific fixed effects framework that captures the presence of unobservables, which may influence investment decisions and labor unrest simultaneously. Results indicate that labor unrest is endogenous across the states of India, and has a strong negative impact on foreign investment. Copyright � 2007 The Authors; Journal compilation � 2007 Blackwell Publishing Ltd.
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Bibliographic InfoArticle provided by Wiley Blackwell in its journal Review of Development Economics.
Volume (Year): 11 (2007)
Issue (Month): 4 (November)
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Other versions of this item:
- Nidhiya Menon & Paroma Sanyal, 2005. "Labor Conflict and Foreign Investments: An Analysis of FDI in India," Development and Comp Systems 0504006, EconWPA.
- L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
- L5 - Industrial Organization - - Regulation and Industrial Policy
- O2 - Economic Development, Technological Change, and Growth - - Development Planning and Policy
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