Export Structure, FDI and Child Labour

Matthias Busse and Sebastian Braun
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Sebastian Braun: HWWA Hamburg Institute of International Economics

Journal of Economic Integration, 2004, vol. 19, 804-829

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 (search for similar items in EconPapers)
JEL-codes: C31 F15 J82 (search for similar items in EconPapers)
Date: 2004
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Persistent link: https://EconPapers.repec.org/RePEc:ris:integr:0290

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