“A panel data analysis of FDI and informal labor markets”
AbstractThe objective of this paper is to examine whether informal labor markets affect the flows of Foreign Direct Investment (FDI), and also whether this effect is similar in developed and developing countries. With this aim, different public data sources, such as the World Bank (WB), and the United Nations Conference on Trade and Development (UNCTAD) are used, and panel econometric models are estimated for a sample of 65 countries over a 14 year period (1996-2009). In addition, this paper uses a dynamic model as an extension of the analysis to establish whether such an effect exists and what its indicators and significance may be. While the results shows that informal labor markets are significant and do positively affect the flow of FDI, these effects are felt up to a certain level of informality, above which the effect becomes negative. The results are similar for developed and developing countries and are robust to several checks.
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Bibliographic InfoPaper provided by University of Barcelona, Research Institute of Applied Economics in its series IREA Working Papers with number 201404.
Length: 33 pages
Date of creation: Feb 2014
Date of revision: Feb 2014
Foreign Direct Investment; Informal labor markets; Institutions. JEL classification: F16; F23; J8; M5;
Find related papers by JEL classification:
- F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
- F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
- J8 - Labor and Demographic Economics - - Labor Standards
- M5 - Business Administration and Business Economics; Marketing; Accounting - - Personnel Economics
This paper has been announced in the following NEP Reports:
- NEP-ALL-2014-03-01 (All new papers)
- NEP-CSE-2014-03-01 (Economics of Strategic Management)
- NEP-INT-2014-03-01 (International Trade)
- NEP-IUE-2014-03-01 (Informal & Underground Economics)
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