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Title:Is more mobility good? Firm mobility and the low wage-low productivity trap PDF Logo
Authors:Seguino, Stephanie
Issue Date:2005
Series/Report no.:Working papers // The Levy Economics Institute 423
Abstract: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.
Subjects:Foreign direct investment
productivity
capital mobility
JEL:F2
F16
O3
Document Type:Working Paper
Appears in Collections:Working Papers, Levy Economics Institute of Bard College

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