In a world where some consumers are not self-interested and the action of non-governmental organizations (NGOs) reveals information, the price of a good produced by a multinational enterprise and the latter's relocation and production decisions depend on labor standards. We study the effect of an increase in NGO activism on labor standards and welfare in less developed countries (LDC). An increase in NGO activism improves labor practices unless consumers like inequity. A priori, activism could either increase or decrease LDC welfare. We give parameter restrictions that determine which way it moves.
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Paper provided by Centre for Studies in Economics and Finance (CSEF), University of Naples, Italy in its series CSEF Working Papers with number
101.
Length: Date of creation: 01 Jun 2003 Date of revision: Publication status: Published as “Fairness, Consumer Consciousness and the Welfare of Less Developed Countries” in Global Economy Journal, 8 (1) (2008), Article 7. Handle: RePEc:sef:csefwp:101
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Find related papers by JEL classification: F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business J80 - Labor and Demographic Economics - - Labor Standards - - - General O12 - Economic Development, Technological Change, and Growth - - Economic Development - - - Microeconomic Analyses of Economic Development
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