This file is part of IDEAS, which uses RePEc data


[ Papers | Articles | Software | Books | Chapters | Authors | Institutions | JEL Classification | NEP reports | Search | New papers by email | Author registration | Rankings | Volunteers | FAQ | Blog | Help! ]

Is the World Flat? Differential Regulation of Domestic and Foreign-Owned Firms

Author info | Abstract | Publisher info | Download info | Related research | Statistics
Author Info
Elizabeth Asiedu (Department of Economics, The University of Kansas)
Hadi Salehi Esfahani (Department of Economics, University of Illinois, Urbana-Champaign)

Additional information is available for the following registered author(s):

Abstract

This paper examines the determinants of differential employment restrictions applied to foreign vs. domestic firms. We develop a model of employment regulation and test its implications using data from the World Bank's World Business Environment Survey, conducted in 1999/2000. We find that while democratic accountability, corruption, and British legal origin reduce the extent of government intervention in firms' employment decision, they give greater advantage to domestic relative to foreign investors. Rule of law, on the other hand, has a more even effect. Better investment opportunities in the country enhance the government's bargaining power vis-à-vis investors and increase employment intervention, especially in foreign firms engaged in less tradable sectors. We also identify a host of other factors that influence employment restrictions, though none of them entail a differential impact on foreign investors. We find that after controlling for other factors, foreign investors in Latin America face a greater regulatory disadvantage vis-à-vis locals compared to other regions of the world, though this is partly counterbalanced by other effects captured in the model.

Download Info
To download:

If you experience problems downloading a file, check if you have the proper application to view it first. Information about this may be contained in the File-Format links below. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://www2.ku.edu/~kuwpaper/2007Papers/200703.pdf
File Format: application/pdf
File Function:
Download Restriction: no

Publisher Info
Paper provided by University of Kansas, Department of Economics in its series WORKING PAPERS SERIES IN THEORETICAL AND APPLIED ECONOMICS with number 200703.

Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Length: 28 pages
Date of creation: Jul 2007
Date of revision:
Handle: RePEc:kan:wpaper:200703

Contact details of provider:
Postal: 415 Snow Hall, Lawrence, KS 66045
Phone: (785) 864-3501
Fax: (785) 864-5270
Email:
Web page: http://www2.ku.edu/~kuwpaper/
More information through EDIRC

For technical questions regarding this item, or to correct its listing, contact: (Ronald Caldwell).

Related research
Keywords: Employment Regulation; Foreign Direct Investment; Political Economy.;

Other versions of this item:

Find related papers by JEL classification:
L5 - Industrial Organization - - Regulation and Industrial Policy
F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
O2 - Economic Development, Technological Change, and Growth - - Development Planning and Policy

This paper has been announced in the following NEP Reports:

Statistics
Access and download statistics

Did you know? There are NEP reports in over 80 fields that deliver new research to your email.

This page was last updated on 2009-12-6.

This information is provided to you by IDEAS at the Department of Economics, College of Liberal Arts and Sciences, University of Connecticut using RePEc data on a server sponsored by the Society for Economic Dynamics.