Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/22716
Authors: 
Broll, Udo
Hansen, Sabine
Marjit, Sugata
Year of Publication: 
2004
Series/Report no.: 
Dresden discussion paper in economics 12/04
Abstract: 
The competitive allocation of labor across different sectors of an economy may not be socially optimal when one sector uses foreign capital. We argue that a suitably designed government intervention is required to restrict the sectors to their optimal size and maximize national welfare. Such a policy internalizes the possibility of repatriation and reinvestment. We demonstrate the optimality of a minimum wage regulation.
Subjects: 
Foreign capital
factor mobility
national welfare
targeting
JEL: 
F16
F21
Document Type: 
Working Paper

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