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    Employment Protection and Firm Relocation: Theory and Evidence

    Dewit, Gerda and Görg, Holger and Temouri, Yama (2018) Employment Protection and Firm Relocation: Theory and Evidence. Kiel Working Paper, 2012. ISSN 1862–1155

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    We examine the determinants of the decision to relocate activities abroad for firms located in OECD countries. We argue that particular firm-specific features play a crucial role for the link between employment protection and relocation. Stricter employment protection laws in the current production location discourage firms’ relocation abroad. While larger, more productive firms and firms with higher labour intensities have, ceteris paribus, higher propensities to relocate, they also face higher exit barriers if the country from which they consider relocating has strict employment protection laws. Our predictions are supported empirically, using firm level data for 28 OECD countries.

    Item Type: Article
    Keywords: Employment Protection; Relocation; Multinational Enterprises; Multinational Firms, International Business; Firm Organization and Market Structure; Labor Standards: National and International: Public Policy;
    Academic Unit: Faculty of Social Sciences > Economics, Finance and Accounting
    Item ID: 11370
    Depositing User: Gerda Dewit
    Date Deposited: 18 Oct 2019 09:48
    Journal or Publication Title: Kiel Working Paper
    Publisher: Kiel Institute for the World Economy
    Refereed: Yes
      Use Licence: This item is available under a Creative Commons Attribution Non Commercial Share Alike Licence (CC BY-NC-SA). Details of this licence are available here

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