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Title:Labour market regulation and foreign direct investment: US multinationals in Germany and the UK PDF Logo
Authors:Pull, Kerstin
Issue Date:2002
Series/Report no.:IAAEG discussion paper series 2002/04
Abstract:At a time of intensifying uncertainty, managerial flexibility to adapt to changes in the economic environment is increasingly important. Different business loca-tions, it is frequently argued, offer this flexibility to differing degrees, and labour market regulations are held to be one essential factor in determining the resulting attractiveness of a country as a business location. This paper takes an options perspective in order to grasp the potential effect of labour market regulations on location decisions. The option value of an investment, it is argued, is influenced, among other factors, by labour market regulations. Depending on their prefer-ence for certain options, different investors will prefer different labour market settings. The ability of the options perspective to assess the role of labour market regulations for the attractiveness of international business locations is exempli-fied by a British-German comparison and then confronted with secondary data as well as with a unique data set derived from a survey of US multinationals in the UK and Germany.
Subjects:labour market regulation
location decision
option value of flexibility
JEL:F23
J53
Document Type:Working Paper
Appears in Collections:IAAEU Discussion Paper Series in Economics, Institut für Arbeitsrecht und Arbeitsbeziehungen in der Europäischen Union, Trier

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