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Trade and Investment Effects of Forced Labour: An Empirical Assessment

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Author Info
Busse, Matthias
Braun, Sebastian

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Abstract

This paper explores the international economic effects of forced labour, namely the linkages of forced labour with comparative advantage (trade) and foreign direct investment flows. It discusses several forms and the prevalence of forced labour and presents the results of empirical tests of those linkages. The results show that forced labour may enhance the endowment of unskilled labour. It can thus be expected to improve comparative advantage in unskilled-labour-intensive goods, that is, commodities where the impact of forced labour is likely to be felt most strongly. In contrast, foreign direct investment is negatively linked with forced labour. This result even holds for relatively poor developing countries. ZUSAMMENFASSUNG In dem vorliegenden Beitrag werden die internationalen ökonomischen Auswirkungen der Zwangsarbeit untersucht, das heißt die Beziehung zwischen Zwangsarbeit sowie ausländischen Direktinvestitionen einerseits und komparativen Handelsvorteilen anderseits. Im Mittelpunkt dabei steht zum einen eine Diskussion verschiedener Formen und der Verbreitung von Zwangsarbeit, zum anderen eine empirische Überprüfung dieser Zusammenhänge. Die Ergebnisse zeigen einen positiven Zusammenhang zwischen Ausmaß von Zwangsarbeit und komparativen Handelsvorteilen bei den arbeitsintensiven Industrieprodukten, die vorwiegend von Zwangsarbeit betroffen sind. Auf der anderen Seite investieren internationale Konzerne überwiegend in Ländern, die unterdurchschnittlich von Zwangsarbeit betroffen sind. Dies gilt auch für relativ arme Entwicklungsländer.

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Publisher Info
Paper provided by Hamburg Institute of International Economics in its series Discussion Paper Series with number 26231.

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Date of creation: 2002
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Handle: RePEc:ags:hiiedp:26231

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Related research
Keywords: Forced Labour; Trade; Foreign Direct Investment; Cross-Country Regression Framework; International Relations/Trade; Labor and Human Capital; F14; F23; O19;

Cited by:
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  1. Espen Villanger, 2006. "Is bonded labor voluntary? A framework against forced work," CMI Working Papers WP 2006: 7, CMI (Chr. Michelsen Institute), Bergen, Norway. [Downloadable!]
  2. Busse, Matthias & Spielmann, Christian, 2003. "Gender Discrimination and the International Division of Labour," Discussion Paper Series 26151, Hamburg Institute of International Economics. [Downloadable!]
  3. Yana van der Meulen Rodgers & Gunseli Berik, 2006. "Asia's Race to Capture Post-MFA Markets: A Snapshot of Labor Standards, Compliance, and Impacts on Competitiveness," Working Paper Series, Department of Economics, University of Utah 2006_02, University of Utah, Department of Economics.
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