Suppression or Diffusion? Effects of Foreign Direct Investment on Labor Rights Protection in Emerging Market Countries


Hye Jee Cho

When capital is mobile internationally but labor is not, do workers suffer? The conventional answer to this question is that governments have a strong incentive to refrain from protecting workers’ rights in order to gain a competitive advantage in the world market. However, those who are optimistic about economic globalization posit that increased economic integration will lead to improvements in labor rights around the world, because economic globalization can transmit superior human rights norms generally and better labor protection specifically. Despite the significance of the question, relatively few studies are devoted to understanding the question, and the literature suffers theoretical and empirical problems. Therefore, this proposed research will examine how the effects of foreign direct investment (FDI) on labor rights and regulations differ depending on the source countries and industries, using improved and textured data on FDI and labor rights in emerging market countries around the world.

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