Must improved labor standards hurt accumulation in the targeted sector? Stylized analysis of a developing economy
This paper analyzes a stylized small open economy that consists of two tradable output-producing sectors: a manufacturing sector and a (mainly tourism-related) services sector. Assuming sectoral differences based on stylized facts, we explore the impact of higher labor standards in the manufacturing sector on the long-term prospects of the economy using comparative dynamic exercises to analyze changes in relative prices, foreign capital flows, and the sectoral distribution of investment and output. We find, in particular, that imposing higher standards across the manufacturing sector could, under certain conditions, shift the structure of the domestic economy in favor of that sector. This result is driven by changes in relative profitability in the presence of learning-by-exporting.
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- CUYVERS, Ludo & SOENG, Reth & PLASMANS, Joseph & VAN DEN BULCKE, Daniël, 2008. "Productivity spillovers from foreign direct investment in the Cambodian manufacturing sector: Evidence from establishment-level data," Working Papers 2008004, University of Antwerp, Faculty of Applied Economics.
- Prasad, Eswar & Rajan, Raghuram G. & Subramanian, Arvind, 2007.
"Foreign Capital and Economic Growth,"
IZA Discussion Papers
3186, Institute for the Study of Labor (IZA).
- Drusilla K. Brown, 2000.
"International Trade and Core Labour Standards: A Survey of the Recent Literature,"
OECD Labour Market and Social Policy Occasional Papers
43, OECD Publishing.
- Drusilla K. Brown, 2000. "International Trade and Core Labor Standards: A Survey of the Recent Literature," Discussion Papers Series, Department of Economics, Tufts University 0005, Department of Economics, Tufts University.
- Lall, Sanjaya, 1998. "Exports of Manufactures by Developing Countries: Emerging Patterns of Trade and Location," Oxford Review of Economic Policy, Oxford University Press, vol. 14(2), pages 54-73, Summer.
- Blecker, Robert A., 1996. "The new economic integration: Structuralist models of North-South trade and investment liberalization," Structural Change and Economic Dynamics, Elsevier, vol. 7(3), pages 321-345, September.
- Dani Rodrik, 2008. "The Real Exchange Rate and Economic Growth," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 39(2 (Fall)), pages 365-439.
- Van Biesebroeck, Johannes, 2005.
"Exporting raises productivity in sub-Saharan African manufacturing firms,"
Journal of International Economics,
Elsevier, vol. 67(2), pages 373-391, December.
- Johannes Van Biesebroeck, 2003. "Exporting Raises Productivity in Sub-Saharan African Manufacturing Plants," NBER Working Papers 10020, National Bureau of Economic Research, Inc.
- Maskus, Keith E., 1997. "Should core labor standards be imposed through international trade policy?," Policy Research Working Paper Series 1817, The World Bank.
- Pedro Martins & Yong Yang, 2009. "The impact of exporting on firm productivity: a meta-analysis of the learning-by-exporting hypothesis," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 145(3), pages 431-445, October.
- Martin, Will & Maskus, Keith E, 2001. "Core Labor Standards and Competitiveness: Implications for Global Trade Policy," Review of International Economics, Wiley Blackwell, vol. 9(2), pages 317-28, May.
- Lall, Sanjaya, 1998. "Erratum: Exports of Manufactures by Developing Countries: Emerging Patterns of Trade and Location," Oxford Review of Economic Policy, Oxford University Press, vol. 14(3), pages 168, Autumn.
When requesting a correction, please mention this item's handle: RePEc:eee:streco:v:22:y:2011:i:4:p:299-312. See general information about how to correct material in RePEc.
If references are entirely missing, you can add them using this form.