IDEAS home Printed from https://ideas.repec.org/a/bla/labour/v37y2023i1p122-159.html
   My bibliography  Save this article

South to north investment linkages and decent work in Brazil

Author

Listed:
  • Patrick Wagner
  • Damian Raess

Abstract

Over the last 25 years, the BRICs asserted themselves as drivers of globalization. But what does their new‐found prominence mean for working conditions at home? Using a novel sub‐national database covering outward investment linkages and working conditions in Brazilian municipalities, this study tests whether a direct investment in Europe leads to the introduction of decent working conditions in Brazil. The empirical results provide strong support for the investing‐up effect using a mixture of panel data analysis and text analysis. The results suggest that economic integration with high‐standard developed countries can act as a powerful mechanism for labor standard improvements in developing countries.

Suggested Citation

  • Patrick Wagner & Damian Raess, 2023. "South to north investment linkages and decent work in Brazil," LABOUR, CEIS, vol. 37(1), pages 122-159, March.
    • Handle: RePEc:bla:labour:v:37:y:2023:i:1:p:122-159
    DOI: 10.1111/labr.12239
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/labr.12239
    Download Restriction: no
    File URL: https://libkey.io/10.1111/labr.12239?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Bosch, Mariano & Goni, Edwin & Maloney, William, 2007. "The determinants of rising informality in Brazil : Evidence from gross worker flows," Policy Research Working Paper Series 4375, The World Bank.
    2. Ulyssea, Gabriel & Ponczek, Vladimir, 2018. "Enforcement of Labor Regulation and the Labor Market Effects of Trade: Evidence from Brazil," IZA Discussion Papers 11783, Institute of Labor Economics (IZA).
    3. Axel Dreher & Andreas Fuchs, 2015. "Rogue aid? An empirical analysis of China's aid allocation," Canadian Journal of Economics, Canadian Economics Association, vol. 48(3), pages 988-1023, August.
    4. Neumayer, Eric & Soysa, Indra de, 2006. "Globalization and the Right to Free Association and Collective Bargaining: An Empirical Analysis," World Development, Elsevier, vol. 34(1), pages 31-49, January.
    5. Davies, Ronald B. & Vadlamannati, Krishna Chaitanya, 2013. "A race to the bottom in labor standards? An empirical investigation," Journal of Development Economics, Elsevier, vol. 103(C), pages 1-14.
    6. Wladimir Andreff, 2016. "Outward Foreign Direct Investment from BRIC countries: Comparing strategies of Brazilian, Russian, Indian and Chinese multinational companies," Post-Print halshs-01342391, HAL.
    7. David KUCERA, 2002. "Core labour standards and foreign direct investment," International Labour Review, International Labour Organization, vol. 141(1-2), pages 31-69, March.
    8. Maria Sagrario Floro & John Messier, 2011. "Is there a link between quality of employment and indebtedness? the case of urban low-income households in Ecuador," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 35(3), pages 499-526.
    9. Edwards, Tony & Tempel, Anne, 2010. "Explaining variation in reverse diffusion of HR practices: Evidence from the German and British subsidiaries of American multinationals," Journal of World Business, Elsevier, vol. 45(1), pages 19-28, January.
    10. Glauco Arbix & Luiz Caseiro, 2012. "Destination And Strategy Of Brazilian Multinationals," Journal of Academic Research in Economics, Spiru Haret University, Faculty of Accounting and Financial Management Constanta, vol. 4(2 (July)), pages 117-148.
    11. Zeng, Ka & Eastin, Joshua, 2012. "Do Developing Countries Invest Up? The Environmental Effects of Foreign Direct Investment from Less-Developed Countries," World Development, Elsevier, vol. 40(11), pages 2221-2233.
    12. Niklas Engbom & Gustavo Gonzaga & Christian Moser & Roberta Olivieri, 2022. "Earnings inequality and dynamics in the presence of informality: The case of Brazil," Quantitative Economics, Econometric Society, vol. 13(4), pages 1405-1446, November.
    13. Wladimir Andreff, 2016. "Outward Foreign Direct Investment from BRIC countries: Comparing strategies of Brazilian, Russian, Indian and Chinese multinational companies," Université Paris1 Panthéon-Sorbonne (Post-Print and Working Papers) halshs-01342391, HAL.
    14. Almeida, Rita & Carneiro, Pedro, 2009. "Enforcement of labor regulation and firm size," Journal of Comparative Economics, Elsevier, vol. 37(1), pages 28-46, March.
    15. Brian Burgoon & Damian Raess, 2014. "Chinese investment and European labor: should and do workers fear Chinese FDI?," Asia Europe Journal, Springer, vol. 12(1), pages 179-197, March.
    16. Flanagan, Robert J., 2006. "Globalization and Labor Conditions," OUP Catalogue, Oxford University Press, number 9780195306002.
    17. Richard ANKER & Igor CHERNYSHEV & Philippe EGGER & Farhad MEHRAN & Joseph A. RITTER, 2003. "Measuring decent work with statistical indicators," International Labour Review, International Labour Organization, vol. 142(2), pages 147-178, June.
    18. Rui, Huaichuan & Yip, George S., 2008. "Foreign acquisitions by Chinese firms: A strategic intent perspective," Journal of World Business, Elsevier, vol. 43(2), pages 213-226, March.
    19. Orellano, Verônica Inês Fernandez & Pazello, Elaine Toldo, 2010. "Evolução e determinantes da rotatividade da mão-de-obra nas firmas da indústria paulista na década de 1990," Textos para discussão 270, FGV EESP - Escola de Economia de São Paulo, Fundação Getulio Vargas (Brazil).
    20. Fei, Ding, 2020. "Variegated work regimes of Chinese investment in Ethiopia," World Development, Elsevier, vol. 135(C).
    21. Dix-Carneiro, Rafael & Kovak, Brian K., 2019. "Margins of labor market adjustment to trade," Journal of International Economics, Elsevier, vol. 117(C), pages 125-142.
    22. Dani Rodrik, 1998. "Has Globalization Gone Too Far?," Challenge, Taylor & Francis Journals, vol. 41(2), pages 81-94, March.
    23. Olney, William W., 2013. "A race to the bottom? Employment protection and foreign direct investment," Journal of International Economics, Elsevier, vol. 91(2), pages 191-203.
    24. Stevis, Dimitris., 2009. "International framework agreements and global social dialogue : lessons from the Daimler case," ILO Working Papers 994456943402676, International Labour Organization.
    25. Cui, Lin & Meyer, Klaus E. & Hu, Helen Wei, 2014. "What drives firms’ intent to seek strategic assets by foreign direct investment? A study of emerging economy firms," Journal of World Business, Elsevier, vol. 49(4), pages 488-501.
    26. Dharam GHAI, 2003. "Decent work: Concept and indicators," International Labour Review, International Labour Organization, vol. 142(2), pages 113-145, June.
    27. Adolph, Christopher & Quince, Vanessa & Prakash, Aseem, 2017. "The Shanghai Effect: Do Exports to China Affect Labor Practices in Africa?," World Development, Elsevier, vol. 89(C), pages 1-18.
    28. Lucas Ronconi, 2012. "Globalization, Domestic Institutions, and Enforcement of Labor Law: Evidence from Latin America," Industrial Relations: A Journal of Economy and Society, Wiley Blackwell, vol. 51(1), pages 89-105, January.
    29. Joao Carlos Ferraz & David Kupfer & Franklin Serrano, 1999. "Macro/Micro interactions: Economic and institutional uncertainties and structural change in Brazilian industry," Oxford Development Studies, Taylor & Francis Journals, vol. 27(3), pages 279-304.
    30. Perkins, Richard & Neumayer, Eric, 2012. "Does the ‘California effect’ operate across borders? trading- and investing-up in automobile emission standards," LSE Research Online Documents on Economics 42097, London School of Economics and Political Science, LSE Library.
    31. Andrea Bassanini & Danielle Venn, 2008. "The Impact of Labour Market Policies on Productivity in OECD Countries," International Productivity Monitor, Centre for the Study of Living Standards, vol. 17, pages 3-15, Fall.
    32. Guillermo E. Perry & William F. Maloney & Omar S. Arias & Pablo Fajnzylber & Andrew D. Mason & Jaime Saavedra-Chanduvi, 2007. "Informality : Exit and Exclusion," World Bank Publications - Books, The World Bank Group, number 6730.
    33. William Milberg & Ellen Houston, 2005. "The high road and the low road to international competitiveness: Extending the neo-Schumpeterian trade model beyond technology," International Review of Applied Economics, Taylor & Francis Journals, vol. 19(2), pages 137-162.
    34. Wen-Shuenn Deng & Yi-Chen Lin, 2013. "Parameter heterogeneity in the foreign direct investment-income inequality relationship: a semiparametric regression analysis," Empirical Economics, Springer, vol. 45(2), pages 845-872, October.
    35. Duanmu, Jing-Lin, 2014. "A race to lower standards? Labor standards and location choice of outward FDI from the BRIC countries," International Business Review, Elsevier, vol. 23(3), pages 620-634.
    36. repec:ilo:ilowps:445694 is not listed on IDEAS
    37. Anthony Ferner & Matthias Varul, 2000. "‘Vanguard’ Subsidiaries and the Diffusion of New Practices: A Case Study of German Multinationals," British Journal of Industrial Relations, London School of Economics, vol. 38(1), pages 115-140, March.
    38. Evans, Peter, 2014. "National Labor Movements and Transnational Connections: Global Labor’s Evolving Architecture Under Neoliberalism," Institute for Research on Labor and Employment, Working Paper Series qt87b4t45z, Institute of Industrial Relations, UC Berkeley.
    39. Sang‐Bum Park, 2018. "Multinationals and sustainable development: Does internationalization develop corporate sustainability of emerging market multinationals?," Business Strategy and the Environment, Wiley Blackwell, vol. 27(8), pages 1514-1524, December.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Raess, Damian & Wagner, Patrick, 2022. "South to north investment linkages and decent work in Brazil," Papers 1382, World Trade Institute.
    2. Fangjin Ye, 2020. "The impact of bilateral investment treaties (BITs) on collective labor rights in developing countries," The Review of International Organizations, Springer, vol. 15(4), pages 899-921, October.
    3. Krishna Chaitanya Vadlamannati, 2015. "Rewards of (Dis)Integration," ILR Review, Cornell University, ILR School, vol. 68(1), pages 3-27, January.
    4. Jonas Gamso, 2018. "Trade-based adoption of voluntary environmental programs in the developing world: Racing to the top or stuck in the mud?," Policy Sciences, Springer;Society of Policy Sciences, vol. 51(4), pages 515-543, December.
    5. Yanan Li & Ravi Kanbur & Carl Lin, 2019. "Minimum Wage Competition between Local Governments in China," Journal of Development Studies, Taylor & Francis Journals, vol. 55(12), pages 2479-2494, December.
    6. KAMATA Isao, 2020. "Labor Market Flexibility and Inward Foreign Direct Investment," Discussion papers 20057, Research Institute of Economy, Trade and Industry (RIETI).
    7. KAMATA Isao, 2023. "Foreign Direct Investment and Labor Market Flexibility in Host and Source Countries," Discussion papers 23033, Research Institute of Economy, Trade and Industry (RIETI).
    8. Messerschmidt, Luca & Janz, Nicole, 2023. "Unravelling the ‘race to the bottom’ argument: Foreign direct investment and different types of labour rights," World Development, Elsevier, vol. 161(C).
    9. Isao KAMATA, 2021. "Labor Market Flexibility and Inward Foreign Direct Investment:Incentive or Outcome?," Discussion papers e-20-007, Graduate School of Economics , Kyoto University.
    10. Berliner, Daniel & Greenleaf, Anne & Lake, Milli & Noveck, Jennifer, 2015. "Building Capacity, Building Rights? State Capacity and Labor Rights in Developing Countries," World Development, Elsevier, vol. 72(C), pages 127-139.
    11. Matthew Amengual & Salo Coslovsky & Duanyi Yang, 2017. "Who opposes labor regulation? Explaining variation in employers’ opinions," Regulation & Governance, John Wiley & Sons, vol. 11(4), pages 404-421, December.
    12. Daniela Maggioni & Grazia D. Santangelo & Seda Koymen-Ozer, 2019. "MNEs’ location strategies and labor standards: The role of operating and reputational considerations across industries," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 50(6), pages 948-972, August.
    13. Potrafke, Niklas, 2013. "Globalization and labor market institutions: International empirical evidence," Journal of Comparative Economics, Elsevier, vol. 41(3), pages 829-842.
    14. Sara Kahn-Nisser, 2017. "Channels of Influence: The EU and Delta Convergence of Core Labour Standards in the Eastern Neighbourhood," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 29(1), pages 127-143, January.
    15. Jirjahn, Uwe, 2024. "Corporate Globalization and Worker Representation," IZA Discussion Papers 16727, Institute of Labor Economics (IZA).
    16. Boisjoly, Geneviève & Moreno-Monroy, Ana Isabel & El-Geneidy, Ahmed, 2017. "Informality and accessibility to jobs by public transit: Evidence from the São Paulo Metropolitan Region," Journal of Transport Geography, Elsevier, vol. 64(C), pages 89-96.
    17. Erik Jonasson, 2011. "Informal Employment and the Role of Regional Governance," Review of Development Economics, Wiley Blackwell, vol. 15(3), pages 429-441, August.
    18. Mehmet Öçal & Özal Çiçek, 2021. "Neo-Liberalizmin Gölgesinde İstihdam: Dünyada İstihdamın Durumuna İnsani Bir Bakış," Journal of Social Policy Conferences, Istanbul University, Faculty of Economics, vol. 0(80), pages 321-363, June.
    19. Benfratello, Luigi & D’Ambrosio, Anna & Sangrigoli, Alida, 2023. "Foreign Direct Investments in Africa: Are Chinese investors different?," Journal of Business Research, Elsevier, vol. 155(PA).
    20. Luca Messerschmidt & Nicole Janz, 2020. "Unravelling the 'race to the bottom' argument: How does FDI affect different types of labour rights?," Munich Papers in Political Economy 05, Munich School of Politics and Public Policy and the School of Management at the Technical University of Munich.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:labour:v:37:y:2023:i:1:p:122-159. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: https://edirc.repec.org/data/csrotit.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.