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Proceedings of the German Development Economics Conference, 2011 (Berlin) >
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http://hdl.handle.net/10419/48282
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| Title: | | FDI and the labor share in developing countries: A theory and some evidence  |
| Authors: | | Maarek, Paul Decreuse, Bruno |
| Issue Date: | | 2011 |
| Series/Report no.: | | Proceedings of the German Development Economics Conference, Berlin 2011 54 |
| Abstract: | | We address the effects of FDI on the labor share in developing countries. Our theory relies on the impacts of FDI on productive heterogeneity in a frictional labor market. FDI have two opposite effects: a negative force originated by technological advance, and a positive force due to increased labor market competition between
firms. We test this theory on aggregate panel data through
fixed effects and system-GMM estimations. We
find a U-shaped relationship between the labor share in the manufacturing sector and the ratio of FDI stock to GDP. Most countries are stuck in the decreasing part of the curve. |
| Subjects: | | FDI Matching frictions Firm heterogeneity Technological advance |
| JEL: | | E25 F16 F21 |
| Document Type: | | Conference Paper |
| Appears in Collections: | | Proceedings of the German Development Economics Conference, 2011 (Berlin)
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