Does the impact of employment protection legislation on FDI differ by the low-skill intensity of sectors? An empirical investigation

Markus Leibrecht, Christian Bellak

Publikation: Working/Discussion PaperWorking Paper/Preprint


In line with previous literature this paper finds that employment protection legislation, especially regulations towards regular employment, has a negative impact on the volume of inward Foreign Direct Investment. Yet, we also find that the deterrent effect of inflexible labor markets is predominantly given for industries with relatively high shares of low skilled workers employed. This result is consistent with the view that high exit costs due to strict employment protection legislation matters particularly for mobile industries like the textile, food and wood industries which continuously seek for low labor cost locations
PublikationsstatusVeröffentlicht - 1 Okt. 2009


ReiheThe Leverhulme Centre for Research on Globalisation and Economic Policy Research Papers

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