companies relocate poor countries abundant supplies cheap labor wages decline

As companies relocate to poor countries with abundant supplies of cheap labor, wages decline and

journal article

DOES RELOCATION OF ECONOMIC ACTIVITIES HURT LABOUR IN THE HOME COUNTRY?

Giornale degli Economisti e Annali di Economia

Nuova Serie, Vol. 60 (Anno 114), No. 1 (Giugno 2001)

, pp. 97-133 (37 pages)

Published By: EGEA SpA

//www.jstor.org/stable/41954962

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Abstract

In many industrialised economies, there is growing concern about the relocation of economic activities abroad. This paper analyses whether this concern is justified. The authors show that theory predicts ambiguous effects of relocation on (the employment and production levels of) the country of origin. Therefore, whether such effects are positive or negative is an empirical question. A survey of empirical works shows no convincing evidence that outward foreign investment is harmful. Rather, there often exist complementarities between foreign and home production, so that investing abroad might actually increase domestic production and employment.

Journal Information

È la rivista italiana di economia con la più lunga tradizione ed ampia diffusione all'estero. Rinnovato nella linea editoriale, privilegia nei suoi articoli due generi di contributi: analisi a carattere empirico e istituzionale sui problemi relativi all'economia italiana, pubblicati in lingua inglese, e rassegne critiche di particolari aree di ricerca nella letteratura più recente, redatti anche in lingua italiana.

Publisher Information

Egea is a publishing company controlled by Bocconi University. Founded in 1988 in order to promote and spread the Academic culture in Economics and Business, it has strengthen its position proposing Higher Education Textbooks & Researches, Long-life Learning, Professional, Trade and Non-fiction, increasing its offer and enlarging its audience. Today Egea can offer a catalogue with more then 1.300 titles, 900 digital products and 4 magazines. In the Higher Education area, Egea is significantly investing in innovation and services, differentiating its contents and output forms (paper, digital/paper, multimedia additional resources, exercises, custom publishing, etc.) and keeping quality and cultural relevance as its utmost priority. Nata nel 1988 per documentare e diffondere la cultura economico-manageriale elaborata in ambito universitario, ha progressivamente ampliato l'originaria missione, mettendo a disposizione del mondo dello studio, delle professioni, delle imprese e del lavoro efficaci strumenti di cultura e aggiornamento. Con il marchio Università Bocconi Editore, inoltre, Egea intende offrire il meglio dell'editoria di cultura, proponendo contributi qualificati al dibattito sulle scienze sociali, con testi di alta divulgazione, di respiro nazionale e internazionale.

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