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Export Structure, FDI and Child Labour

Author

Listed:
  • Matthias Busse

    (HWWA Hamburg Institute of International Economics)

  • Sebastian Braun

    (HWWA Hamburg Institute of International Economics)

Abstract

The paper addresses the linkage between certain aspects of the increasing economic integration of world markets and the level of child labour. We empirically examine, first, the often-cited conventional wisdom that multinational enterprises invest in countries where the extent of child labour is relatively high and, second, the concern that countries may gain an unfair comparative advantage in trade by using child labour. The results indicate that multinationals are highly sensitive with respect to the location of their transplants and prefer countries with lower levels of child labour. The opposite outcome applies to child labour and comparative advantage in labour-intensive goods, where we find a statistically significant positive relationship. Based on these results, the paper also discusses some policy implications on how to deal with child labour effectively.

Suggested Citation

  • Matthias Busse & Sebastian Braun, 2004. "Export Structure, FDI and Child Labour," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 19, pages 804-829.
    • Handle: RePEc:ris:integr:0290
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    Cited by:

    1. Elias Dinopoulos & Laixun Zhao, 2007. "Child Labor and Globalization," Journal of Labor Economics, University of Chicago Press, vol. 25(3), pages 553-579.
    2. repec:hum:wpaper:sfb649dp2006-014 is not listed on IDEAS
    3. Burhan, Nik Ahmad Sufian & Sidek, Abdul Halim & Ibrahim, Saifuzzaman, 2016. "Eradicating the Crime of Child Labour in Africa: The Roles of Income, Schooling, Fertility, and Foreign Direct Investment," MPRA Paper 77250, University Library of Munich, Germany.
    4. Dagdemir, Ozcan & Acaroglu, Hakan, . "The effects of globalization on child labor in developing countries," Business and Economic Horizons (BEH), Prague Development Center (PRADEC), vol. 2(2), pages 1-12.
    5. Polyxeni Kechagia & Theodore Metaxas, 2021. "Are Working Children in Developing Countries Hidden Victims of Pandemics?," Social Sciences, MDPI, vol. 10(9), pages 1-18, August.
    6. Polyxeni Kechagia & Theodore Metaxas, 2023. "Capital Inflows and Working Children in Developing Countries: An Empirical Approach," Sustainability, MDPI, vol. 15(7), pages 1-18, April.
    7. Himashi Muthugala & Tharaka Magammana & Amanda Bandara & Ayodhya Perera & Ruwan Jayathilaka, 2025. "Unveiling the Economic Determinants of Child Labour in Africa: A Comprehensive Study of 37 Countries," Child Indicators Research, Springer;The International Society of Child Indicators (ISCI), vol. 18(3), pages 1329-1361, June.
    8. Tadashi Morita & Kouki Sugawara, 2015. "Human capital and FDI: Development process of the developing country in an overlapping generation model," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 24(7), pages 922-946, October.
    9. Kechagia, Polyxeni & Metaxas, Theodore, 2020. "FDI, child labor and gender issues in Sub – Saharan Africa: an empirical approach," MPRA Paper 104311, University Library of Munich, Germany.
    10. Jacopo Timini & Nicola Cortinovis & Fernando López Vicente, 2022. "The heterogeneous effects of trade agreements with labour provisions," The World Economy, Wiley Blackwell, vol. 45(9), pages 2820-2853, September.
    11. Sebastian Braun, 2006. "Core Labour Standards and FDI: Friends or Foes? The Case of Child Labour," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 142(4), pages 765-791, December.
    12. Dwibedi, Jayanta Kumar & Chaudhuri, Sarbajit, 2014. "Agricultural subsidy policies fail to deal with child labour under agricultural dualism: What could be the alternative policies?," Research in Economics, Elsevier, vol. 68(3), pages 277-291.

    More about this item

    Keywords

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    JEL classification:

    • C31 - Mathematical and Quantitative Methods - - Multiple or Simultaneous Equation Models; Multiple Variables - - - Cross-Sectional Models; Spatial Models; Treatment Effect Models; Quantile Regressions; Social Interaction Models
    • F15 - International Economics - - Trade - - - Economic Integration
    • J82 - Labor and Demographic Economics - - Labor Standards - - - Labor Force Composition

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