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Is labour the fall guy of a financial-led globalisation? A cross-country inquiry on globalisation, financialisation and employment at the industry level

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  • Cédric Durand
  • Sébastien Miroudot

Abstract

Financialisation and globalisation have important implications for the functioning of economies and, in particular, for employment. However, their impact on labour market dynamics has not been sufficiently analysed. The aim of this article is to contribute to fill this gap in the literature with a cross-country analysis at the industry level. The authors identify four industry dynamics (Protection, Expansion, Escape from production and Decline with sunk costs) and explore the hypothesis that financialisation is a phenomenon mostly specific to mature developed economies. They provide an econometric analysis at the country and industry level of the relationship between globalisation, financialisation and employment over the period 1995–2009. They estimate a standard labour demand function in which they introduce financialisation as a demand shifter. They also propose a simple model to explain the financialisation phenomenon and provide a regression testing its prevalence, including regressions with an interaction term between offshoring and financialisation. Their result does not point out to a financial-led globalisation but shows that labour is impacted negatively through the financialisation observed in certain industries. Copyright Kiel Institute 2015

Suggested Citation

  • Cédric Durand & Sébastien Miroudot, 2015. "Is labour the fall guy of a financial-led globalisation? A cross-country inquiry on globalisation, financialisation and employment at the industry level," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 151(3), pages 409-432, August.
  • Handle: RePEc:spr:weltar:v:151:y:2015:i:3:p:409-432
    DOI: 10.1007/s10290-015-0217-x
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    Cited by:

    1. Vincent FRIGANT, 2019. "Industry 4.0, towards a de-globalization of value chains? Expected effects of advanced industrial robotics and additive manufacturing on the coordination system," Cahiers du GREThA (2007-2019) 2019-12, Groupe de Recherche en Economie Théorique et Appliquée (GREThA).
    2. Tristan Auvray & Joel Rabinovich, 2019. "The financialisation–offshoring nexus and the capital accumulation of US non-financial firms," Cambridge Journal of Economics, Cambridge Political Economy Society, vol. 43(5), pages 1183-1218.
    3. Lee, Woocheol, 2022. "Domestic Share of Value-Added and the Development of Production Capabilities of Local Firms within Global Value Chains," Journal of Economic Development, The Economic Research Institute, Chung-Ang University, vol. 47(2), pages 81-99, June.
    4. Cédric Durand & David Flacher & Vincent Frigant, 2018. "Étudier les chaînes globales de valeur comme une forme d’organisation industrielle," Revue d'économie industrielle, De Boeck Université, vol. 0(3), pages 13-34.
    5. Bruno Carballa Smichowski & Cédric Durand & Steven Knauss, 2016. "Uneven development patterns in global value chains," Working Papers hal-01368948, HAL.
    6. repec:hal:cepnwp:hal-01492373 is not listed on IDEAS
    7. Anh Tuan Bui & Thu Phuong Pham, 2021. "Financial and Labour Obstacles and Firm Employment: Evidence from Europe and Central Asia Firms," Sustainability, MDPI, vol. 13(15), pages 1-18, August.
    8. repec:hal:cepnwp:hal-01368948 is not listed on IDEAS
    9. Sébastien Lechevalier, 2015. "Globalization and labor market outcomes: de-industrialization, job security, and wage inequalities—introduction by guest editor," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 151(3), pages 405-408, August.

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    More about this item

    Keywords

    Offshoring; Globalisation; Financialisation; Employment; Industry dynamics; F66; L16;
    All these keywords.

    JEL classification:

    • F66 - International Economics - - Economic Impacts of Globalization - - - Labor
    • L16 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Industrial Organization and Macroeconomics; Macroeconomic Industrial Structure

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