FDI Deregulation Versus Labor Market Reform: a Political Economy Approach |
| |
Authors: | Louis Jaeck Sehjeong Kim |
| |
Institution: | 1.College of Business and Economics, Department of Economics and Finance,United Arab Emirates University,Al Ain,United Arab Emirates;2.CERGAM-CAE,Aix-Marseille University (AMU),Marseille,France;3.Department of Mathematical Sciences,United Arab Emirates University,Al Ain,United Arab Emirates |
| |
Abstract: | This paper studies the political economy of foreign direct investment (FDI) in interaction with labor market policies. It analyzes the setting of reform focused on deregulating labor markets as a political compromise pressured by the lobbying of an industry lobby and a trade union. Using a common agency model of lobbying, we show that the interest group’s influence is socially distortive towards less deregulation. Also, our political economy framework shows that, for large countries, exogenous FDI liberalization policies lead to deregulation in the labor market. For small countries, such policies enhance more labor market rigidities. |
| |
Keywords: | |
本文献已被 SpringerLink 等数据库收录! |
|