TY  - JOUR
AU  - Brown,Drusilla K.
AU  - Deardorff,Alan V.
AU  - Stern,Robert M.
TI  - The Effects of Multinational Production on Wages and Working Conditions in Developing Countries
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 9669
PY  - 2003
Y2  - May 2003
UR  - http://www.nber.org/papers/w9669
L1  - http://www.nber.org/papers/w9669.pdf
N1  - Author contact info:
Drusilla K. Brown

Alan Deardorff
Department of Economics
Tappan Street
University of Michigan
Ann Arbor, MI  48109
E-Mail: alandear@umich.edu

Robert Stern
Department of Economics
University of Michigan
Ann Arbor, MI   48109-1220
Tel: 734-764-2373
E-Mail: rmstern@umich.edu
M1  - published as Drusilla K. Brown, Alan Deardorff, Robert Stern. "The Effects of Multinational Production on Wages and Working Conditions in Developing Countries," in Robert E. Baldwin and L. Alan Winters, editors, "Challenges to Globalization: Analyzing the Economics" University of Chicago Press (2004)

AB  - This paper assesses the evidence regarding the effects of multinational production on wages and working conditions in developing countries.  It is motivated by recent controversies concerning whether multinational firms in developing countries exploit workers by paying low wages and subjecting them to substandard conditions.  We first address efforts of activist groups, universities, and colleges in the  Anti-Sweatshop' Campaign in the United States, the social accountability of multinational firms, and the role of such international institutions as the International Labor Organization and World Trade Organization in dealing with labor standards and trade.  We then consider conceptually how foreign direct investment might affect host-country wages.  Available theories yield ambiguous predictions, leaving the effects to be examined empirically.  We therefore, finally, review empirical evidence on multinational firm wages in developing countries, and the relationship between foreign direct investment and labor rights.  This evidence indicates that multinational firms routinely provide higher wages and better working conditions than their local counterparts, and they are typically not attracted preferentially to countries with weak labor standards.
ER  -