Export Structure, FDI and Child Labour

33 Pages Posted: 15 May 2003

See all articles by Matthias Busse

Matthias Busse

Ruhr-University Bochum

Sebastian Braun

Kiel Institute for the World Economy - IFW

Date Written: 2003

Abstract

The paper addresses the linkage between certain aspects of the increasing economic integration of world markets and the level of child labour. We empirically examine, first, the often-cited conventional wisdom that multinational enterprises invest in countries where the extent of child labour is relatively high and, second, the concern that countries may gain an unfair comparative advantage in trade by using child labour. The results indicate that multinationals are highly sensitive with respect to the location of their transplants and prefer countries with lower levels of child labour. The opposite outcome applies to child labour and comparative advantage in labour-intensive goods, where we find a statistically significant positive relationship. Based on these results, the paper also discusses some policy implications on how to deal with child labour effectively.

Keywords: Child Labour, Economic Integration, Trade, FDI

JEL Classification: C31, F15, J82

Suggested Citation

Busse, Matthias and Braun, Sebastian Till, Export Structure, FDI and Child Labour (2003). Available at SSRN: https://ssrn.com/abstract=378100 or http://dx.doi.org/10.2139/ssrn.378100

Matthias Busse (Contact Author)

Ruhr-University Bochum ( email )

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

Sebastian Till Braun

Kiel Institute for the World Economy - IFW ( email )

United States

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