How important is employment protection legislation for Foreign Direct Investment flows in Central and Eastern European countries?

Markus Leibrecht and Johann Scharler

The Economics of Transition, 2009, vol. 17, issue 2, pages 275-295

Abstract: In this article we investigate empirically the importance of labour market conditions and in particular the role of employment protection legislation as determinants of bilateral Foreign Direct Investment (FDI). We find that FDI flows are significantly higher in countries with relatively low unit labour costs. We also find that employment protection legislation does not exert a statistically significant impact on FDI flows. Our results are consistent with the interpretation that transition economies attract FDI via low production costs whereas indirect costs related to the rigidity of the labour market are less relevant. Copyright (c) 2009 The Authors. Journal compilation (c) 2009 The European Bank for Reconstruction and Development.

Date: 2009

Downloads: (external link)
http://www.blackwell-synergy.com/doi/abs/10.1111/j.1468-0351.2009.00353.x link to full text (text/html)
Access to full text is restricted to subscribers.

Related works:
Working Paper: How Important is Employment Protection Legislation for Foreign Direct Investment Flows in Central and Eastern European Countries? (2007)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:bla:etrans:v:17:y:2009:i:2:p:275-295

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0967-0750

Access Statistics for this article

The Economics of Transition is edited by Philippe Aghion and Wendy Carlin

More articles in The Economics of Transition from The European Bank for Reconstruction and Development
Series data maintained by Christopher F. Baum ().