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The twin effects of globalization

Author

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  • Daveri, Francesco
  • Manasse, Paolo
  • Serra, Danilo

Abstract

Employees of"globalized"firms face a riskier, but potentially more rewarding, menu of labor market outcomes. The authors document this neglected tradeoff of globalization for a sample of Indian manufacturing firms. On the one hand, the employees of firms subject to foreign competition face a more uncertain stream of earnings and riskier employment prospects. On the other hand, they enjoy a more rapid career growth and have more opportunities to train and upgrade their skills. The negative uncertainty costs and the positive incentive effects of globalization are thus twin to each other. Concentrating on just one side of the coin gives a misleading picture of globalization.

Suggested Citation

  • Daveri, Francesco & Manasse, Paolo & Serra, Danilo, 2003. "The twin effects of globalization," Policy Research Working Paper Series 3154, The World Bank.
  • Handle: RePEc:wbk:wbrwps:3154
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    References listed on IDEAS

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    1. van de Walle, Dominique & Gunewardena, Dileni, 2001. "Sources of ethnic inequality in Viet Nam," Journal of Development Economics, Elsevier, vol. 65(1), pages 177-207, June.
    2. Lloyd, Cynthia B & Mete, Cem & Sathar, Zeba A, 2005. "The Effect of Gender Differences in Primary School Access, Type, and Quality on the Decision to Enroll in Rural Pakistan," Economic Development and Cultural Change, University of Chicago Press, vol. 53(3), pages 685-710, April.
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    Cited by:

    1. Epifani Paolo, 2003. "Trade liberalization, Firm Performances and Labor Market Outcomes in the Developing World, what Can We Learn From Micro-Level Data?," Rivista italiana degli economisti, Società editrice il Mulino, pages 455-486.
    2. Pranab Bardhan, 2006. "Globalization, Inequality, and Poverty," IDB Publications (Working Papers) 9126, Inter-American Development Bank.
    3. Pranab Bardhan, 2006. "Globalization, Inequality, and Poverty," IDB Publications (Working Papers) 2329, Inter-American Development Bank.
    4. Erkan Erdem & James Tybout, 2003. "Trade Policy and Industrial Sector Responses: Using Evolutionary Models to Interpret the Evidence," NBER Working Papers 9947, National Bureau of Economic Research, Inc.

    More about this item

    Keywords

    Small Scale Enterprise; Environmental Economics&Policies; Microfinance; Labor Policies; Economic Theory&Research; Environmental Economics&Policies; Economic Theory&Research; Microfinance; Private Participation in Infrastructure; Small Scale Enterprise;

    JEL classification:

    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation

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