Labor Conflict and Foreign Investments: An Analysis of FDI in India
AbstractThis paper analyzes patterns of foreign direct investment in India. We investigate how labor conflict, credit constraints, and indicators of a state’s economic health influence location decisions of foreign firms. We account for the possible endogeneity of labor conflict variables in modeling the location decisions of foreign firms. This is accomplished by using a state-specific fixed effects framework that captures the presence of unobservables, which may influence investment decisions and labor unrest simultaneously. Results indicate that labor unrest is endogenous across the states of India, and has a strong negative impact on foreign investment.
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Bibliographic InfoPaper provided by EconWPA in its series Development and Comp Systems with number 0504006.
Length: 31 pages
Date of creation: 13 Apr 2005
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Foreign Direct Investment; Labor Disputes; Developing Countries; India.;
Other versions of this item:
- Nidhiya Menon & Paroma Sanyal, 2007. "Labor Conflict and Foreign Investments: An Analysis of FDI in India," Review of Development Economics, Wiley Blackwell, vol. 11(4), pages 629-644, November.
- L2 - Industrial Organization - - Firm Objectives, Organization, and Behavior
- L5 - Industrial Organization - - Regulation and Industrial Policy
- O2 - Economic Development, Technological Change, and Growth - - Development Planning and Policy
This paper has been announced in the following NEP Reports:
- NEP-ALL-2005-04-16 (All new papers)
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