FDI and the labor share in developing countries : A theory and some evidence

  title={FDI and the labor share in developing countries : A theory and some evidence},
  author={Bruno Decreuse and Paul Maarek},
  • Bruno Decreuse, Paul Maarek
  • Published 2008
This paper addresses the impact of FDI on the factor distribution of income in developing countries. We propose a theory that relies on the impacts of FDI on productive heterogeneity between …rms in a frictional labor market. We argue that FDI have two opposite e¤ects on the labor share: a negative force originated by market power and technological advance, and a positive force due to increased labor market competition between …rms. Then, we test this theory on aggregate panel data through …xed… CONTINUE READING


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