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Globalization, Labor Market Regulation, and Firm Behavior

Author

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  • Meyer, Moritz

    (World Bank)

  • Vandenberg, Paul

    (Asian Development Bank)

Abstract

The paper analyzes the link between firm characteristics and labor market regulation in five Asian economies—Bangladesh, Indonesia, Pakistan, the Philippines, and Viet Nam. Labor market policies and labor standards do not only affects workers, but also influence firms’ investment and employment decisions. The empirical analysis uses information from enterprise surveys. Empirical results describe systematic differences in the perceived level of labor market regulation. Controlling for a wide set of firm characteristics, the perceived level of labor market regulation is found to vary between firms that participate in global trade as against those supplying the domestic market. The in-country location of a firm is also a significant determinant. The level of labor intensity explains variation in the reported level of labor market regulation between firms. Findings support a better understanding of the types of firms that find labor market regulation to be an obstacle to their operations, and can be used to design targeted policy interventions.

Suggested Citation

  • Meyer, Moritz & Vandenberg, Paul, 2013. "Globalization, Labor Market Regulation, and Firm Behavior," ADB Economics Working Paper Series 361, Asian Development Bank.
    • Handle: RePEc:ris:adbewp:0361
    Note: http://www.adb.org/sites/default/files/pub/2013/ewp-361.pdf
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    References listed on IDEAS

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    More about this item

    Keywords

    labor market institutions (regulation); trade and labor markets; developing countries;
    All these keywords.

    JEL classification:

    • D22 - Microeconomics - - Production and Organizations - - - Firm Behavior: Empirical Analysis
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand

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