Employment Protection and Firm Relocation: Theory and Evidence

Arbeitspapier

We examine the determinants of the decision to relocate activities abroad for firms located in OECD countries. We argue that particular firm-specific features play a crucial role for the link between employment protection and relocation. Stricter employment protection laws in the current production location discourage firms' relocation abroad. While larger, more productive firms and firms with higher labour intensities have, ceteris paribus, higher propensities to relocate, they also face higher exit barriers if the country from which they consider relocating has strict employment protection laws. Our predictions are supported empirically, using firm level data for 28 OECD countries.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: KCG Working Paper ; No. 11

Classification and Topics

• Classification: Wirtschaft ; Multinational Firms; International Business ; Organization of Production ; Labor Standards: Public Policy
• Subject: Employment Protection ; Relocation ; Multinational Enterprises

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Dewit, Gerda ; Görg, Holger ; Temouri, Yama
• Event: Veröffentlichung
• (who): Kiel Centre for Globalization (KCG)
• (where): Kiel
• (when): 2018

Further information

• Handle: http://hdl.handle.net/10419/177812
• Last update: 10.03.2025, 11:43 AM CET