How Important is Employment Protection Legislation for Foreign Direct Investment Flows in Central and Eastern European Countries?
AbstractThe purpose of this paper is to investigate empirically the importance of labor market conditions and in particular of employment protection legislation as a determinant of bilateral Foreign Direct Investment flows to seven Central and Eastern European countries. Although our results indicate that countries characterized by low unit labor costs tend to attract more Foreign Direct Investment, we find no evidence suggesting that employment protection legislation matters in this context. This result also holds if we control for the riskiness of the host countries.
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Bibliographic InfoPaper provided by Department of Economics, Johannes Kepler University Linz, Austria in its series Economics working papers with number 2007-16.
Date of creation: Oct 2007
Date of revision:
Foreign Direct Investment; Central and Eastern Europe; Labor Market; Employment Protection;
Other versions of this item:
- Markus Leibrecht & Johann Scharler, 2009. "How important is employment protection legislation for Foreign Direct Investment flows in Central and Eastern European countries?," The Economics of Transition, The European Bank for Reconstruction and Development, vol. 17(2), pages 275-295, 04.
- F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
- F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
- J50 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-10-20 (All new papers)
- NEP-LAB-2007-10-20 (Labour Economics)
- NEP-REG-2007-10-20 (Regulation)
- NEP-TRA-2007-10-20 (Transition Economics)
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