Trade and Investment Effects of Forced Labour: An Empirical Assessment

30 Pages Posted: 28 Feb 2003

See all articles by Matthias Busse

Matthias Busse

Ruhr-University Bochum; HWWI - Hamburg Institute of International Economics

Sebastian Braun

Kiel Institute for the World Economy - IFW

Date Written: 2002

Abstract

This paper explores the international economic effects of forced labour, namely the linkages of forced labour with comparative advantage (trade) and foreign direct investment flows. It discusses several forms and the prevalence of forced labour and presents the results of empirical tests of those linkages. The results show that forced labour may enhance the endowment of unskilled labour. It can thus be expected to improve comparative advantage in unskilled-labour-intensive goods, that is, commodities where the impact of forced labour is likely to be felt most strongly. In contrast, foreign direct investment is negatively linked with forced labour. This result even holds for relatively poor developing countries.

Keywords: Forced Labour, Trade, Foreign Direct Investment, Cross-country Regression Framework

JEL Classification: F14, F23, O19

Suggested Citation

Busse, Matthias and Braun, Sebastian Till, Trade and Investment Effects of Forced Labour: An Empirical Assessment (2002). HWWA Discussion Paper No. 200. Available at SSRN: https://ssrn.com/abstract=346780 or http://dx.doi.org/10.2139/ssrn.346780

Matthias Busse (Contact Author)

Ruhr-University Bochum ( email )

Faculty of Management and Economics, GC 3/145
D-44780 Bochum, DE 44780
Germany

HWWI - Hamburg Institute of International Economics

Heimhuder Str. 71
Hamburg, 20148
Germany

Sebastian Till Braun

Kiel Institute for the World Economy - IFW ( email )

United States

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