Premium
Does the Impact of Employment Protection Legislation on Foreign Direct Investment Differ by the Skill Intensity of Industries? An Empirical Note
Author(s) -
Bellak Christian,
Leibrecht Markus
Publication year - 2011
Publication title -
the world economy
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.594
H-Index - 68
eISSN - 1467-9701
pISSN - 0378-5920
DOI - 10.1111/j.1467-9701.2011.01394.x
Subject(s) - foreign direct investment , employment protection legislation , legislation , investment (military) , economics , labour economics , r&d intensity , empirical evidence , international economics , macroeconomics , law , unemployment , philosophy , epistemology , management , politics , political science
In line with previous literature, we find that strict employment protection deters foreign direct investment. This finding is consistent with the view that rigid labour markets result in high adjustment and exit costs which discourage firm investment. Moreover, our results are consistent with the view that the deterrent effect of rigid labour markets depends on the skill intensity of an industry.