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Trade and Investment Effects of Forced Labour: An Empirical Assessment

Author

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  • Busse, Matthias
  • Braun, Sebastian

Abstract

This paper explores the international economic effects of forced labour, namely the linkages of forced labour with comparative advantage (trade) and foreign direct investment flows. It discusses several forms and the prevalence of forced labour and presents the results of empirical tests of those linkages. The results show that forced labour may enhance the endowment of unskilled labour. It can thus be expected to improve comparative advantage in unskilled-labour-intensive goods, that is, commodities where the impact of forced labour is likely to be felt most strongly. In contrast, foreign direct investment is negatively linked with forced labour. This result even holds for relatively poor developing countries. ZUSAMMENFASSUNG In dem vorliegenden Beitrag werden die internationalen ökonomischen Auswirkungen der Zwangsarbeit untersucht, das heißt die Beziehung zwischen Zwangsarbeit sowie ausländischen Direktinvestitionen einerseits und komparativen Handelsvorteilen anderseits. Im Mittelpunkt dabei steht zum einen eine Diskussion verschiedener Formen und der Verbreitung von Zwangsarbeit, zum anderen eine empirische Überprüfung dieser Zusammenhänge. Die Ergebnisse zeigen einen positiven Zusammenhang zwischen Ausmaß von Zwangsarbeit und komparativen Handelsvorteilen bei den arbeitsintensiven Industrieprodukten, die vorwiegend von Zwangsarbeit betroffen sind. Auf der anderen Seite investieren internationale Konzerne überwiegend in Ländern, die unterdurchschnittlich von Zwangsarbeit betroffen sind. Dies gilt auch für relativ arme Entwicklungsländer.

Suggested Citation

  • Busse, Matthias & Braun, Sebastian, 2002. "Trade and Investment Effects of Forced Labour: An Empirical Assessment," Discussion Paper Series 26231, Hamburg Institute of International Economics.
    • Handle: RePEc:ags:hwwadp:26231
    DOI: 10.22004/ag.econ.26231
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    Cited by:

    1. Bakhshi, Samira & Kerr, William A., . "Labour Standards as a Justification for Trade Barriers: Consumer Concerns, Protectionism and the Evidence: Technical Annex," Estey Centre Journal of International Law and Trade Policy, Estey Centre for Law and Economics in International Trade, vol. 11(01), pages 1-10.
    2. repec:dau:papers:123456789/1546 is not listed on IDEAS
    3. Eric Neumayer & Indra De Soysa, 2007. "Globalisation, Women's Economic Rights and Forced Labour," The World Economy, Wiley Blackwell, vol. 30(10), pages 1510-1535, October.
    4. Bakhshi, Samira & Kerr, William A., . "Labour Standards as a Justification for Trade Barriers: Consumer Concerns, Protectionism and the Evidence," Estey Centre Journal of International Law and Trade Policy, Estey Centre for Law and Economics in International Trade, vol. 11(01), pages 1-29.
    5. Ruwanpura, Kanchana N. & Rai, Pallavi., 2004. "Forced labour : definitions, indicators and measurement," ILO Working Papers 993999813402676, International Labour Organization.
    6. repec:dau:papers:123456789/5832 is not listed on IDEAS
    7. Busse, Matthias & Spielmann, Christian, 2003. "Gender Discrimination and the International Division of Labour," HWWA Discussion Papers 245, Hamburg Institute of International Economics (HWWA).
    8. Jean-Marc Siroën, 2012. "Core labour standards and exports," Working Papers DT/2012/18, DIAL (Développement, Institutions et Mondialisation).
    9. repec:dau:papers:123456789/10660 is not listed on IDEAS
    10. Yana van der Meulen Rodgers & Gunseli Berik, 2006. "Asia's Race to Capture Post-MFA Markets: A Snapshot of Labor Standards, Compliance, and Impacts on Competitiveness," Working Paper Series, Department of Economics, University of Utah 2006_02, University of Utah, Department of Economics.
    11. Andrea SITZIA & Benoît LOPEZ, 2023. "Prison labour, customs preference schemes and decent work: Critical analysis and outlook," International Labour Review, International Labour Organization, vol. 162(2), pages 305-326, June.
    12. Bazillier, Remi, 2008. "Core Labor Standards and Development: Impact on Long-Term Income," World Development, Elsevier, vol. 36(1), pages 17-38, January.
    13. Rémi BAZILLIER, 2009. "An Estimation of the Level of Core Labour Standards between 1970 and 1995 : towards a time-series index of Core Labour Standards," LEO Working Papers / DR LEO 219, Orleans Economics Laboratory / Laboratoire d'Economie d'Orleans (LEO), University of Orleans.
    14. Randall Akee & Arnab K. Basu & Arjun Bedi & Nancy H. Chau, 2014. "Transnational Trafficking, Law Enforcement, and Victim Protection: A Middleman Trafficker's Perspective," Journal of Law and Economics, University of Chicago Press, vol. 57(2), pages 349-386.
    15. Coates, Dennis & Heckelman, Jac C. & Wilson, Bonnie, 2010. "The political economy of investment: Sclerotic effects from interest groups," European Journal of Political Economy, Elsevier, vol. 26(2), pages 208-221, June.
    16. repec:ilo:ilowps:399981 is not listed on IDEAS
    17. Andrea Sitzia & Benoît Lopez, 2023. "Prison labour, customs preference schemes and decent work: Critical analysis and outlook," Post-Print hal-04191729, HAL.
    18. Robert J. Flanagan & Niny Khor, 2014. "Globalization and the Quality of Asian and Non-Asian Jobs," Asian Development Review, MIT Press, vol. 31(1), pages 163-185, March.

    More about this item

    Keywords

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    JEL classification:

    • O19 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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