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Article: Labor training and foreign direct investment

TitleLabor training and foreign direct investment
Authors
KeywordsCapital flow
Economic development
Foreign direct investment
Investment
Labor relations
Skilled labor
Issue Date2014
PublisherBlackwell Publishing Ltd. The Journal's web site is located at http://www.blackwellpublishing.com/journal.asp?ref=0965-7576&site=1
Citation
Review of International Economics, 2014, v. 22 n. 1, p. 151–166 How to Cite?
AbstractEvidence shows that most foreign direct investment (FDI) flows from developed to developed countries (North-North) in skilled labor-intensive industries. This paper builds a model that incorporates labor training into the proximity-concentration tradeoffs to analyze the entry mode of multinationals to a foreign country. Production requires both skilled labor and unskilled labor. A multinational pursuing FDI needs to provide training to some workers in the host country to equip them with skills that are specific to the production of the firm. Labor training and skill specificity lead to contract friction. It is shown that in skilled labor-intensive industries, FDI increases along with the economic development level of the host country, whereas in unskilled labor-intensive industries, the reverse is true. This paper provides a theoretical explanation for the empirical findings on the prevalence of North-North FDI in skilled labor-industries and North-South FDI in unskilled labor-intensive industries. © 2014 John Wiley & Sons Ltd.
Persistent Identifierhttp://hdl.handle.net/10722/187608
ISSN
2015 Impact Factor: 0.558
2015 SCImago Journal Rankings: 0.518
ISI Accession Number ID

 

DC FieldValueLanguage
dc.contributor.authorLiu, Qen_US
dc.contributor.authorQiu, LDen_US
dc.date.accessioned2013-08-21T07:05:17Z-
dc.date.available2013-08-21T07:05:17Z-
dc.date.issued2014-
dc.identifier.citationReview of International Economics, 2014, v. 22 n. 1, p. 151–166en_US
dc.identifier.issn0965-7576-
dc.identifier.urihttp://hdl.handle.net/10722/187608-
dc.description.abstractEvidence shows that most foreign direct investment (FDI) flows from developed to developed countries (North-North) in skilled labor-intensive industries. This paper builds a model that incorporates labor training into the proximity-concentration tradeoffs to analyze the entry mode of multinationals to a foreign country. Production requires both skilled labor and unskilled labor. A multinational pursuing FDI needs to provide training to some workers in the host country to equip them with skills that are specific to the production of the firm. Labor training and skill specificity lead to contract friction. It is shown that in skilled labor-intensive industries, FDI increases along with the economic development level of the host country, whereas in unskilled labor-intensive industries, the reverse is true. This paper provides a theoretical explanation for the empirical findings on the prevalence of North-North FDI in skilled labor-industries and North-South FDI in unskilled labor-intensive industries. © 2014 John Wiley & Sons Ltd.-
dc.languageengen_US
dc.publisherBlackwell Publishing Ltd. The Journal's web site is located at http://www.blackwellpublishing.com/journal.asp?ref=0965-7576&site=1-
dc.relation.ispartofReview of International Economicsen_US
dc.rightsThe definitive version is available at www.blackwell-synergy.com-
dc.subjectCapital flow-
dc.subjectEconomic development-
dc.subjectForeign direct investment-
dc.subjectInvestment-
dc.subjectLabor relations-
dc.subjectSkilled labor-
dc.titleLabor training and foreign direct investmenten_US
dc.typeArticleen_US
dc.identifier.emailQiu, LD: larryqiu@hku.hken_US
dc.identifier.authorityQiu, LD=rp01093en_US
dc.description.naturelink_to_OA_fulltext-
dc.identifier.doi10.1111/roie.12102-
dc.identifier.scopuseid_2-s2.0-84892466655-
dc.identifier.hkuros216821en_US
dc.identifier.volume22-
dc.identifier.issue1-
dc.identifier.spage151-
dc.identifier.epage166-
dc.identifier.isiWOS:000329547000002-
dc.publisher.placeUnited Kingdom-
dc.customcontrol.immutablesml 140415-

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