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Labor Rights And Foreign Direct Investment In Latin America: The Empirical Analysis Of Proximity Hypothesis, Cesar H. Villegas

Theses and Dissertations

What impact do labor rights practices have on foreign direct investment (FDI) in Latin America? While existing research shows how participation in the global production network influences host country’s labor standards, few studies delve into reversed causal mechanisms whereby changes in labor standards affects FDI inflows. While conventional wisdom says protection of labor rights has negative influence on FDI, I argue that for Latin American countries, practical protection of labor rights attracts FDI. Practical protection of labor right acts as a proxy and signals that host government could protect foreign assets that are under the risk of expropriation. I expect …