Labor Costs and Foreign Direct Investment: A Panel VAR Approach

Labor Costs and Foreign Direct Investment: A Panel VAR Approach

This paper examines the endogenous interaction between labor costs and Foreign Direct Investment (FDI) in the OECD countries via the Panel VAR approach under system GMM estimates for the period 1995–2009. The available data allows identifying the relevance of the components of labor costs, and allow...

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Main Authors: Bahar Bayraktar-Sağlam, Selin Sayek Böke
Format: Article
Language:English
Published: MDPI AG 2017-09-01
Series:Economies
Subjects:
foreign direct investment
labor cost
panel VAR
Impulse Response Functions
Online Access:https://www.mdpi.com/2227-7099/5/4/36
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spelling doaj-293a8a0fc00249b8a49966c2a0cf903c2020-11-24T22:04:13ZengMDPI AGEconomies2227-70992017-09-01543610.3390/economies5040036economies5040036Labor Costs and Foreign Direct Investment: A Panel VAR ApproachBahar Bayraktar-Sağlam0Selin Sayek Böke1Department of Economics, Hacettepe University, Beytepe 06800, Ankara, TurkeyDepartment of Economics, Bilkent University, Bilkent 06800, Ankara, TurkeyThis paper examines the endogenous interaction between labor costs and Foreign Direct Investment (FDI) in the OECD countries via the Panel VAR approach under system GMM estimates for the period 1995–2009. The available data allows identifying the relevance of the components of labor costs, and allows a detailed analysis across different sectors. Empirical findings have revealed that sectoral composition of FDI and the decomposition of labor costs play a significant role in investigating the dynamic association between labor costs and FDI. Further, results suggest that labor market policies should focus on productivity-enhancing tools in addition to price hindering tools.https://www.mdpi.com/2227-7099/5/4/36foreign direct investmentlabor costpanel VARImpulse Response Functions
collection DOAJ
language English
format Article
sources DOAJ
author Bahar Bayraktar-Sağlam
Selin Sayek Böke
spellingShingle Bahar Bayraktar-Sağlam
Selin Sayek Böke
Labor Costs and Foreign Direct Investment: A Panel VAR Approach
Economies
foreign direct investment
labor cost
panel VAR
Impulse Response Functions
author_facet Bahar Bayraktar-Sağlam
Selin Sayek Böke
author_sort Bahar Bayraktar-Sağlam
title Labor Costs and Foreign Direct Investment: A Panel VAR Approach
title_short Labor Costs and Foreign Direct Investment: A Panel VAR Approach
title_full Labor Costs and Foreign Direct Investment: A Panel VAR Approach
title_fullStr Labor Costs and Foreign Direct Investment: A Panel VAR Approach
title_full_unstemmed Labor Costs and Foreign Direct Investment: A Panel VAR Approach
title_sort labor costs and foreign direct investment: a panel var approach
publisher MDPI AG
series Economies
issn 2227-7099
publishDate 2017-09-01
description This paper examines the endogenous interaction between labor costs and Foreign Direct Investment (FDI) in the OECD countries via the Panel VAR approach under system GMM estimates for the period 1995–2009. The available data allows identifying the relevance of the components of labor costs, and allows a detailed analysis across different sectors. Empirical findings have revealed that sectoral composition of FDI and the decomposition of labor costs play a significant role in investigating the dynamic association between labor costs and FDI. Further, results suggest that labor market policies should focus on productivity-enhancing tools in addition to price hindering tools.
topic foreign direct investment
labor cost
panel VAR
Impulse Response Functions
url https://www.mdpi.com/2227-7099/5/4/36
work_keys_str_mv AT baharbayraktarsaglam laborcostsandforeigndirectinvestmentapanelvarapproach
AT selinsayekboke laborcostsandforeigndirectinvestmentapanelvarapproach
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