WP No. 2, "The Impact of Labour Market Institutions on Foreign Direct Investment: Evidence from South America", Agustín Velásquez
Abstract WP 2:
By running linear regressions on a panel of ten South American countries for the period 1980-2011, this paper tested the “race to the bottom” hypothesis in particular the role played by de jure labour market institutions, i.e. minimum wage and employment protection legislation. The "race to the bottom" is a hypothesis that multinational enterprises react positively to the loosening of countries’ national labour market regulation by increasing their outward foreign direct investments.