Journal article | Zeitschriftenartikel

Should I stay or should I go? Foreign direct investment, employment protection and domestic anchorage

This paper examines theoretically and empirically how employment protection legislation affects location decisions of multinationals. We depart from the "conventional wisdom" by examining not only the effect of protection on inward foreign direct investment (FDI), but also a country's ability to "anchor" potential outward investment. Based on our simple theoretical framework, we estimate an empirical model, using data on bilateral FDI and employment protection indices for OECD countries, and controlling for other labour market institutions and investment costs. We find that, while an "unfavourable" employment protection differential between a domestic and a foreign location is inimical to FDI, a high domestic level of employment protection tends to discourage outward FDI. The results are in line with our conjecture that strict employment protection in the firm's home country makes firms reluctant to relocate abroad and keeps them "anchored" at home.

Should I stay or should I go? Foreign direct investment, employment protection and domestic anchorage

Urheber*in: Dewit, Gerda; Görg, Holger; Montagna, Catia

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Umfang
Seite(n): 93-110
Sprache
Englisch
Anmerkungen
Status: Postprint; begutachtet (peer reviewed)

Erschienen in
Review of World Economics, 145(1)

Thema
Wirtschaft
Arbeitsmarktforschung
Volkswirtschaftslehre

Ereignis
Geistige Schöpfung
(wer)
Dewit, Gerda
Görg, Holger
Montagna, Catia
Ereignis
Veröffentlichung
(wo)
Deutschland
(wann)
2009

DOI
URN
urn:nbn:de:0168-ssoar-203109
Rechteinformation
GESIS - Leibniz-Institut für Sozialwissenschaften. Bibliothek Köln
Letzte Aktualisierung
21.06.2024, 16:27 MESZ

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Objekttyp

  • Zeitschriftenartikel

Beteiligte

  • Dewit, Gerda
  • Görg, Holger
  • Montagna, Catia

Entstanden

  • 2009

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