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Is More Mobility Good? Firm Mobility and the Low Wage-Low Productivity Trap

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  • Stephanie Seguino

Abstract

This paper explores the possibility that unregulated FDI flows are causally implicated in the decline in labor productivity growth in semi- industrialized economies. These effects are hypothesized to operate through the negative impact of firm mobility on worker bargaining power and thus affecting wages. Downward pressure on wages can reduce the pressure on firms to raise productivity in defense of profits, contributing to a low wage–low productivity trap. This paper presents empirical evidence, based on panel data fixed effects and GMM estimation for 37 semi-industrialized economies, that supports the causal link between increased firm mobility and lower wages, as well as slower productivity growth over the period 1970–2000.

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  • Stephanie Seguino, 2005. "Is More Mobility Good? Firm Mobility and the Low Wage-Low Productivity Trap," International Trade 0505008, University Library of Munich, Germany.
    • Handle: RePEc:wpa:wuwpit:0505008
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    Cited by:

    1. Elissa Braunstein, 2019. "Foreign direct investment and development from a gender perspective," Chapters, in: Jonathan Michie (ed.), The Handbook of Globalisation, Third Edition, chapter 10, pages 178-187, Edward Elgar Publishing.
    2. Stephanie Seguino & Caren Grown, 2006. "Gender equity and globalization: macroeconomic policy for developing countries," Journal of International Development, John Wiley & Sons, Ltd., vol. 18(8), pages 1081-1104.
    3. Stephanie Seguino, 2005. "All types of inequality are not created equal: divergent impacts of inequality on economic growth," Working Papers 10, ECINEQ, Society for the Study of Economic Inequality, revised Oct 2005.
    4. Seguino, Stephanie, 2003. "Taking gender differences in bargaining power seriously: Equity, labor standards, and living wages," MPRA Paper 6508, University Library of Munich, Germany, revised Oct 2003.
    5. Stephanie Seguino & Mark Setterfield, 2010. "Gender Equality and the Sustainability of Steady State Growth Paths," Chapters, in: Mark Setterfield (ed.), Handbook of Alternative Theories of Economic Growth, chapter 18, Edward Elgar Publishing.
    6. Yılmaz Kılıç aslan & Erol Taymaz, 2009. "Labor market institutions and industrial performance: an evolutionary study," Springer Books, in: Uwe Cantner & Jean-Luc Gaffard & Lionel Nesta (ed.), Schumpeterian Perspectives on Innovation, Competition and Growth, pages 207-222, Springer.
    7. Jeon, Yongsik & Kwon, Chul-Woo, 2018. "The offshoring threat and wage negotiations: Theory and evidence," Japan and the World Economy, Elsevier, vol. 45(C), pages 19-29.
    8. Fink, Gerhard, 2009. "Comparative advantage, regional specialization and income distribution: The case of Austria in perspective," Journal of Policy Modeling, Elsevier, vol. 31(2), pages 239-259.
    9. Seguino, Stephanie, 2006. "The great equalizer?: Globalization effects on gender equality in Latin America and the Caribbean," MPRA Paper 6509, University Library of Munich, Germany.
    10. Stephanie Seguino, 2008. "Gender, Distribution, and Balance of Payments (revised 10/08)," Working Papers wp133_revised, Political Economy Research Institute, University of Massachusetts at Amherst.
    11. Lahimer, Noomen, 2009. "La contribution des investissements directs étrangers à la réduction de la pauvreté en Afrique subsaharienne," Economics Thesis from University Paris Dauphine, Paris Dauphine University, number 123456789/1167 edited by Goaied, Mohamed & Bienaymé, Alain.
    12. Arora, Diksha & Braunstein, Elissa & Seguino, Stephanie, 2023. "A macro analysis of gender segregation and job quality in Latin America," World Development, Elsevier, vol. 164(C).
    13. Seguino, Stephanie, 2006. "The Road to Gender Equality: Global Trends and the Way Forward," MPRA Paper 6510, University Library of Munich, Germany.
    14. Stephanie Seguino & Maureen Were, 2014. "Gendered Perspectives on Economic Growth and Development in Sub-Saharan Africa," WIDER Working Paper Series wp-2014-056, World Institute for Development Economic Research (UNU-WIDER).
    15. Anh Ngoc Nguyen & Nguyen Thi Tuong Anh & Nguyen Ngoc Minh & Nguyen Thi Phuong Mai, 2018. "SOUTH KOREAN MULTINATIONAL ENTERPRISES AND VIETNAM SMEs’ PARTICIPATION IN GLOBAL PRODUCTION NETWORKS IN THE CONTEXT OF INCREASED ASEAN AND EAST ASIAN REGIONAL ECONOMIC INTEGRATION," Working Papers 03, Development and Policies Research Center (DEPOCEN), Vietnam.

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    More about this item

    Keywords

    Foreign direct investment; productivity; capital mobility.;
    All these keywords.

    JEL classification:

    • F2 - International Economics - - International Factor Movements and International Business
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights

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