The attractiveness of foreign investment increases as the cost of foreign firms accessing informal labor decreases.
Authors
- DOI
- https://doi.org/10.56506/BDRU1537
- Pages
- 58
- Published in
- Philippines
Table of Contents
- 1 Introduction 4
- 2 Theoretical Framework 13
- 2.1 Basic Structure 14
- J S 14
- U β logZ 15
- E s 15
- Max 15
- R pq 16
- R βE 16
- L L 16
- H η η 16
- L L 16
- R βE 16
- C W F q 16
- W W 16
- W H 16
- W L W L 16
- 3 Equilibrium 18
- 3.1 Complete Contracts 18
- R C 18
- W H W µL W µ L 18
- H ηR σ 18
- L L 18
- R βE P ϕ σ 19
- W W W 19
- 3.2 Incomplete contracts TCT Approach 19
- 3.3 Equilibrium under Outsourcing 20
- H β ηR σ 21
- L L 21
- L β R σ η 21
- L β R σ η 21
- H L L 21
- H L L 21
- R R βE 21
- R β 22
- W µ β R σ η 22
- Lemma 1 22
- Proof 22
- 3.3.1 Firm Decision FDI vs. Outsourcing 22
- Assumption 1 23
- H ηR σ 23
- L R σ η 23
- H L L 23
- R R βE P 23
- W ρ µ λ 23
- R Bϕ 23
- W W W ρ µ λ 23
- Lemma 2 23
- H H L L L L β . 23
- Proof 23
- L L L L 24
- L R σ η 24
- R R η µ σ W ρ µ λ W 25
- Proposition 1 25
- L L 25
- Proposition 2 26
- Proposition 3 26
- Proof 26
- L L 26
- 4 Empirical Investigations 28
- 4.1 Cross-Country Results Generalized Method of Moments 30
- FDI β β FDI β FDI β Informal labor 30
- FDI FDI 30
- Informal labour 31
- Reputation cost 31
- 4.2 Firm Level Analysis 34
- 4.2.1 Data and Econometric Specification 34
- FOS α α Informal Labor α Informal Labor α Reputation Costs 35
- FOS i j 35
- Reputation Costs 35
- Informal labor 35
- Capital Intensity 35
- 4.2.2 Results 36
- 4.3 IndustryCountry Level Analysis 38
- 4.3.1 Econometric Specification and Data 38
- FOS α α Informal Labor α Informal Labor α Reputation Costs 38
- Reputation Costs 38
- Informal labor 38
- Capital Intensity 38
- 4.3.2 Results 40
- 5 Conclusion 42
- References 44
- Appendix 51
- A Equilibrium under Outsourcing and Integration 51
- Using PRT Approach 51
- B Mathematical Appendix 52
- Tables 54
