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Is More Mobility Good? Firm Mobility and the Low Wage-Low Productivity Trap

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  • Stephanie Seguino

Abstract

This paper explores the possibility that unregulated FDI flows are causally implicated in the decline in labor productivity growth in semi- industrialized economies. These effects are hypothesized to operate through the negative impact of firm mobility on worker bargaining power and thus affecting wages. Downward pressure on wages can reduce the pressure on firms to raise productivity in defense of profits, contributing to a low wage–low productivity trap. This paper presents empirical evidence, based on panel data fixed effects and GMM estimation for 37 semi-industrialized economies, that supports the causal link between increased firm mobility and lower wages, as well as slower productivity growth over the period 1970–2000.

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File URL: http://128.118.178.162/eps/it/papers/0505/0505008.pdf
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Bibliographic Info

Paper provided by EconWPA in its series International Trade with number 0505008.

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Length: 41 pages
Date of creation: 10 May 2005
Date of revision:
Handle: RePEc:wpa:wuwpit:0505008

Note: Type of Document - pdf; pages: 41
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Web page: http://128.118.178.162

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Keywords: Foreign direct investment; productivity; capital mobility.;

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  1. Barro, Robert J & Lee, Jong-Wha, 2001. "International Data on Educational Attainment: Updates and Implications," Oxford Economic Papers, Oxford University Press, vol. 53(3), pages 541-63, July.
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  3. Seguino, Stephanie, 1999. "The Investment Function Revisited: Disciplining Capital in Korea," MPRA Paper 6539, University Library of Munich, Germany.
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  14. Standing, Guy, 1989. "Global feminization through flexible labor," World Development, Elsevier, vol. 17(7), pages 1077-1095, July.
  15. Seguino, Stephanie, 2000. "The Effects of Structural Change and Economic Liberalisation on Gender Wage Differentials in South Korea and Taiwan," Cambridge Journal of Economics, Oxford University Press, vol. 24(4), pages 437-59, July.
  16. Arellano, Manuel & Bond, Stephen, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," Review of Economic Studies, Wiley Blackwell, vol. 58(2), pages 277-97, April.
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Citations

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Cited by:
  1. Yılmaz Kılıçaslan & Erol Taymaz, 2008. "Labor market institutions and industrial performance: an evolutionary study," Journal of Evolutionary Economics, Springer, vol. 18(3), pages 477-492, August.
  2. Stephanie Seguino, 2008. "Gender, Distribution, and Balance of Payments (revised 10/08)," Working Papers wp133_revised, Political Economy Research Institute, University of Massachusetts at Amherst.
  3. Seguino, Stephanie, 2006. "The great equalizer?: Globalization effects on gender equality in Latin America and the Caribbean," MPRA Paper 6509, University Library of Munich, Germany.
  4. Seguino, Stephanie, 2003. "Taking gender differences in bargaining power seriously: Equity, labor standards, and living wages," MPRA Paper 6508, University Library of Munich, Germany, revised Oct 2003.
  5. Lahimer, Noomen, 2009. "La contribution des investissements directs étrangers à la réduction de la pauvreté en Afrique subsaharienne," Economics Thesis from University Paris Dauphine, Paris Dauphine University, number 123456789/1167 edited by Goaied, Mohamed & Bienaymé, Alain.
  6. Stephanie Seguino, 2005. "All Types of Inequality are Not Created Equal: Divergent Impacts of Inequality on Economic Growth," Economics Working Paper Archive wp_433, Levy Economics Institute, The.
  7. Seguino, Stephanie, 2006. "The Road to Gender Equality: Global Trends and the Way Forward," MPRA Paper 6510, University Library of Munich, Germany.
  8. Fink, Gerhard, 2009. "Comparative advantage, regional specialization and income distribution: The case of Austria in perspective," Journal of Policy Modeling, Elsevier, vol. 31(2), pages 239-259.
  9. Seguino, Stephanie & Grown, Caren, 2006. "Gender equity and globalization: Macroeconomic policy for developing countries," MPRA Paper 6540, University Library of Munich, Germany.

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