Is more mobility good? Firm mobility and the low wage-low productivity trap

Arbeitspapier

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.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Working Paper ; No. 423

Classification and Topics

• Classification: Wirtschaft ; Trade and Labor Market Interactions
• Subject: Foreign direct investment ; productivity ; capital mobility ; Direktinvestition ; Produktivität ; Internationale Kapitalmobilität ; Schwellenländer

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Seguino, Stephanie
• Event: Veröffentlichung
• (who): Levy Economics Institute of Bard College
• (where): Annandale-on-Hudson, NY
• (when): 2005

Further information

• Handle: http://hdl.handle.net/10419/31608
• Last update: 10.03.2025, 11:44 AM CET