Publications

Working Paper No. 423 | May 2005

Is More Mobility Good? Firm Mobility and the Low Wage–Low Productivity Trap

This paper explores the possibility that unregulated FDI flows are causally implicated in the decline in labor productivity growth in semi-industrialized economies. These effects are hypothesized to operate through the negative impact of firm mobility on worker bargaining power and thus affecting wages. Downward pressure on wages can reduce the pressure on firms to raise productivity in defense of profits, contributing to a low wage–low productivity trap. This paper presents empirical evidence, based on panel data fixed effects and GMM estimation for 37 semi-industrialized economies, that supports the causal link between increased firm mobility and lower wages, as well as slower productivity growth over the period 1970–2000.

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Author(s):
Stephanie Seguino

Publication Highlight

Working Paper No. 1074
Political Conflict, Green Capabilities, and Growth Patterns in a Kaleckian Small Open Economy
Author(s): José Eduardo Alatorre, Gabriel Porcile, Julia Juarez, Juan Carlos Moreno-Brid
December 2024

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