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Export Structure, FDI and Child Labour

  • Busse, Matthias
  • Braun, Sebastian

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.

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Paper provided by Hamburg Institute of International Economics (HWWA) in its series HWWA Discussion Papers with number 216.

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Date of creation: 2003
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Handle: RePEc:zbw:hwwadp:26174
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  1. Trefler, Daniel, 1993. "Trade Liberalization and the Theory of Endogenous Protection: An Econometric Study of U.S. Import Policy," Journal of Political Economy, University of Chicago Press, vol. 101(1), pages 138-60, February.
  2. Gary Clyde Hufbauer & Jeffrey J. Schott & Kimberly Ann Elliott, 1990. "Economic Sanctions Reconsidered: 2nd Edition," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 82.
  3. David KUCERA, 2002. "Core labour standards and foreign direct investment," International Labour Review, International Labour Organization, vol. 141(1-2), pages 31-69, 03.
  4. Saqib Jafarey & Sajal Lahiri, 1999. "Will trade sanctions reduce child labour? The role of credit markets," Economics Discussion Papers 500, University of Essex, Department of Economics.
  5. Philipp Harms & Heinrich Ursprung, 2001. "Do Civil and Political Repression Really Boost Foreign Direct Investments?," CESifo Working Paper Series 421, CESifo Group Munich.
  6. Carol Ann Rogers & Kenneth A. Swinnerton, 1999. "Inequality, Productivity, and Child Labor," Labor and Demography 9907003, EconWPA, revised 30 Jul 1999.
  7. John F. Helliwell, 1992. "Empirical Linkages Between Democracy and Economic Growth," NBER Working Papers 4066, National Bureau of Economic Research, Inc.
  8. Jai S. Mah, 1997. "Core Labour Standards and Export Performance in Developing Countries," The World Economy, Wiley Blackwell, vol. 20(6), pages 773-785, 09.
  9. Eric Edmonds & Nina Pavcnik, 2002. "Does Globalization Increase Child Labor? Evidence from Vietnam," NBER Working Papers 8760, National Bureau of Economic Research, Inc.
  10. Robert C. Shelburne, 2001. "An Explanation of the International Variation in the Prevalence of Child Labour," The World Economy, Wiley Blackwell, vol. 24(3), pages 359-378, 03.
  11. Carol Rogers & Kenneth A. Swinnerton, 2001. "Inequality, Productivity, and Child Labor: Theory and Evidence," Working Papers gueconwpa~01-01-10, Georgetown University, Department of Economics.
  12. Busse, Matthias, 2002. "Do Labor Standards Affect Comparative Advantage in Developing Countries?," World Development, Elsevier, vol. 30(11), pages 1921-1932, November.
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