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Conference Paper: Labor training and foreign direct investment

TitleLabor training and foreign direct investment
Authors
KeywordsLabor training
Contract frictions
Export
FDI
Heterogenouse firms
Skill intensity
Issue Date2012
PublisherEuropean Trade Study Group.
Citation
The 14th Annual Conference of the European Trade Study Group (ETSG 2012), Leuven, Belgium, 13-15 September 2012. How to Cite?
AbstractEvidence shows that most foreign direct investment (FDI) flows from developed to developed countries (North-to-North) in skilled-labor-intensive industries. This paper builds a model which incorporates labor training to the proximity-concentration tradeoffs to analyze multinationals’ entry mode to a foreign country. Production requires both skilled labor and unskilled labor. A multinational taking FDI needs to provide training to some workers in the host country to equip them with skills which are specific to the firm’s production. Labor training and skill specificity leads to contract friction. We show that in skilled-labor-intensive industries, FDI increases with the host country’s economic development level; but in unskilled-labor-intensive industries, the reverse is true. This paper provides a theoretical explanation to the empirical findings on the prevalence of North-to-North FDI in skilled-labor-industries and North-to-South FDI in unskilled-labor-intensive industries.
DescriptionThe Conference proceedings' website is located at http://www.etsg.org/ETSG2012/Programme/ETSG2012%20Preliminary%20Programme,%2029%20August%202012.htm
Persistent Identifierhttp://hdl.handle.net/10722/188026

 

DC FieldValueLanguage
dc.contributor.authorLiu, Qen_US
dc.contributor.authorQiu, LD-
dc.date.accessioned2013-08-21T07:25:48Z-
dc.date.available2013-08-21T07:25:48Z-
dc.date.issued2012-
dc.identifier.citationThe 14th Annual Conference of the European Trade Study Group (ETSG 2012), Leuven, Belgium, 13-15 September 2012.en_US
dc.identifier.urihttp://hdl.handle.net/10722/188026-
dc.descriptionThe Conference proceedings' website is located at http://www.etsg.org/ETSG2012/Programme/ETSG2012%20Preliminary%20Programme,%2029%20August%202012.htm-
dc.description.abstractEvidence shows that most foreign direct investment (FDI) flows from developed to developed countries (North-to-North) in skilled-labor-intensive industries. This paper builds a model which incorporates labor training to the proximity-concentration tradeoffs to analyze multinationals’ entry mode to a foreign country. Production requires both skilled labor and unskilled labor. A multinational taking FDI needs to provide training to some workers in the host country to equip them with skills which are specific to the firm’s production. Labor training and skill specificity leads to contract friction. We show that in skilled-labor-intensive industries, FDI increases with the host country’s economic development level; but in unskilled-labor-intensive industries, the reverse is true. This paper provides a theoretical explanation to the empirical findings on the prevalence of North-to-North FDI in skilled-labor-industries and North-to-South FDI in unskilled-labor-intensive industries.-
dc.languageengen_US
dc.publisherEuropean Trade Study Group.-
dc.relation.ispartof14th ETSG 2012 Conference Proceedingsen_US
dc.rightsCreative Commons: Attribution 3.0 Hong Kong License-
dc.subjectLabor training-
dc.subjectContract frictions-
dc.subjectExport-
dc.subjectFDI-
dc.subjectHeterogenouse firms-
dc.subjectSkill intensity-
dc.titleLabor training and foreign direct investmenten_US
dc.typeConference_Paperen_US
dc.identifier.emailQiu, LD: larryqiu@hku.hken_US
dc.identifier.authorityQiu, LD=rp01093en_US
dc.description.naturepostprint-
dc.identifier.hkuros216825en_US

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