Labor Conflict and Foreign Investments: An Analysis of FDI in India

Nidhiya Menon and Paroma Sanyal
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Paroma Sanyal: Brandeis University

Development and Comp Systems from University Library of Munich, Germany

Abstract: This paper analyzes patterns of foreign direct investment in India. We investigate how labor conflict, credit constraints, and indicators of a state’s economic health influence location decisions of foreign firms. We account for the possible endogeneity of labor conflict variables in modeling the location decisions of foreign firms. This is accomplished by using a state-specific fixed effects framework that captures the presence of unobservables, which may influence investment decisions and labor unrest simultaneously. Results indicate that labor unrest is endogenous across the states of India, and has a strong negative impact on foreign investment.

Keywords: Foreign Direct Investment; Labor Disputes; Developing Countries; India. (search for similar items in EconPapers)
JEL-codes: L2 L5 O2 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2005-04-13
Note: Type of Document - pdf; pages: 31
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Related works:
Journal Article: Labor Conflict and Foreign Investments: An Analysis of FDI in India (2007)
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Persistent link: https://EconPapers.repec.org/RePEc:wpa:wuwpdc:0504006

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