How Important is Employment Protection Legislation for Foreign Direct Investment Flows in Central and Eastern European Countries?

Markus Leibrecht and Johann Scharler

No 2007-16, Economics working papers from Department of Economics, Johannes Kepler University Linz, Austria

Abstract: The purpose of this paper is to investigate empirically the importance of labor market conditions and in particular of employment protection legislation as a determinant of bilateral Foreign Direct Investment flows to seven Central and Eastern European countries. Although our results indicate that countries characterized by low unit labor costs tend to attract more Foreign Direct Investment, we find no evidence suggesting that employment protection legislation matters in this context. This result also holds if we control for the riskiness of the host countries.

Keywords: Foreign Direct Investment; Central and Eastern Europe; Labor Market; Employment Protection (search for similar items in EconPapers)
JEL-codes: F21 F23 J50 (search for similar items in EconPapers)
Date: 2007-10
New Economics Papers: this item is included in nep-lab, nep-reg and nep-tra
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Related works:
Journal Article: How important is employment protection legislation for Foreign Direct Investment flows in Central and Eastern European countries?1 (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:jku:econwp:2007_16

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