Arbeitspapier

Employment Protection and Firm Relocation: Theory and Evidence

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.

Language
Englisch

Bibliographic citation
Series: KCG Working Paper ; No. 11

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

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

Handle
Last update
10.03.2025, 11:43 AM CET

Data provider

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Object type

  • Arbeitspapier

Associated

  • Dewit, Gerda
  • Görg, Holger
  • Temouri, Yama
  • Kiel Centre for Globalization (KCG)

Time of origin

  • 2018

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