FDI and unemployment, a growth perspective
"North-South foreign direct investment (FDI) is frequently viewed as a process in which jobs relocate from the North to the South. I build a growth model with two asymmetric trading economies, the North where firms innovate and the South where Northern firms invest to take advantage of lower wa...
| Main Author: | |
|---|---|
| Institution: | ETUI-European Trade Union Institute |
| Format: | TEXT |
| Language: | English |
| Published: |
Nürnberg
2018
IAB |
| Subjects: | |
| Online Access: | https://www.labourline.org/KENTIKA-19398877124911160599-FDi-and-unemployment,-a-growth.htm |
| _version_ | 1771659898682081280 |
|---|---|
| author | Stepanok, Ignat |
| author_facet | Stepanok, Ignat |
| collection | Library items |
| description | "North-South foreign direct investment (FDI) is frequently viewed as a process in which jobs relocate from the North to the South. I build a growth model with two asymmetric trading economies, the North where firms innovate and the South where Northern firms invest to take advantage of lower wages. Contrary to expectation, I find that lower FDI costs increase unemployment both in the North and in the South. There are two effects of FDI on unemployment, a direct positive one which contributes to the turnover of firms parallel to innovation. The indirect effect appears through innovation and growth: more FDI means higher innovation, this intensifies firm turnover and increases the unemployment rates in both countries even further. I solve the model analytically without trade costs and imitation of products in the South. For the version with trade costs and imitation I offer a numerical solution in which I also look at the effect of FDI on welfare and find a positive relation. In addition to FDI, I explore how intellectual property (IP) rights protection affects unemployment and welfare. Both are higher in a steady state with stricter IP protection." |
| format | TEXT |
| geographic | international |
| id | 19398877124911160599_7c5bcc8d332542de982f7aefce030de4 |
| institution | ETUI-European Trade Union Institute |
| is_hierarchy_id | 19398877124911160599_7c5bcc8d332542de982f7aefce030de4 |
| is_hierarchy_title | FDI and unemployment, a growth perspective |
| language | English |
| physical | 23 p. Digital |
| publishDate | 2018 |
| publisher | Nürnberg IAB |
| spellingShingle | Stepanok, Ignat foreign investment unemployed trade intellectual property FDI and unemployment, a growth perspective |
| thumbnail | https://www.labourline.org/Image_prev.jpg?Archive=133937995111 |
| title | FDI and unemployment, a growth perspective |
| topic | foreign investment unemployed trade intellectual property |
| url | https://www.labourline.org/KENTIKA-19398877124911160599-FDi-and-unemployment,-a-growth.htm |