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Low Bargaining Power of Labor Attracts FDI to India

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  • B K Nayak
  • Surya Dev

Abstract

In the present era of economic liberalization due to disempowerment of labor—numerical decline of the organized workforce, weakening of trade unions and the consequent decline in the bargaining power of labor have become quite visible. The question arises as to whether there exists any nexus between the bargaining power of labor and the flow of FDI. Notwithstanding low and declining capital-output ratio and high labor efficiency as the obvious determinants of increasing FDI flow, the Indian scenario suggests that FDI flows to the destinations where workers have a low and declining bargaining power.

Suggested Citation

  • B K Nayak & Surya Dev, 2005. "Low Bargaining Power of Labor Attracts FDI to India," The IUP Journal of Financial Economics, IUP Publications, vol. 0(2), pages 52-55, June.
    • Handle: RePEc:icf:icfjfe:v:03:y:2005:i:2:p:52-55
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