Foreign direct investment,labour relations and sector effects: US investment outflows to Europe |
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Authors: | Bernd Brandl Sonja Strohmer Franz Traxler |
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Institution: | 1. The York Management School, University of York, York, UKbernd.brandl@york.ac.uk;3. Department of Industrial Sociology, University of Vienna, Vienna, Austria |
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Abstract: | This paper analyses the impact of national labour relations on foreign direct investment (FDI), with emphasis on macro-markets and sector properties. Since there are sector-specific differences between industries in transferability, labour-relations effects on FDI probably vary across sectors. The paper finds that labour costs dampen FDI, while the impact of national market potential remains inconclusive. Collective labour institutions have a significantly adverse impact on FDI in manufacturing, and a relatively beneficial one on FDI in services. While investment in manufacturing seeks to minimize labour costs at given skill levels, investment in services maximizes skills at given levels of cost. |
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Keywords: | foreign direct investment industrial relations macro-markets multinationals sector analysis |
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