FDI, Unemployment, and Welfare in the Presence of Agricultural Dualism: A Three-Sector General Equilibrium Model
The present paper uses a three-sector general equilibrium framework to examine the effect of Foreign Direct Investment (FDI) on unemployment and welfare in labour-surplus economies in the post-globalisation era. We show that the expansion of land-hungry export-oriented agricultural sector through FDI accentuates the problem of urban unemployment in the presence of sticky urban wage and agricultural dualism. We also note that multiple cross-effects and factor specificity play an important role in determining change in output composition and welfare in the wake of the inflow of foreign capital.
Volume (Year): 49 (2010)
Issue (Month): 2 ()
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