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Globalization and the right to free association and collective bargaining: an empirical analysis

Neumayer, Eric ORCID: 0000-0003-2719-7563 and De Soysa, Indra (2006) Globalization and the right to free association and collective bargaining: an empirical analysis. World Development, 34 (1). pp. 31-49. ISSN 0305-750X

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Identification Number: 10.1016/j.worlddev.2005.06.009


Economies that are more open to trade and foreign direct investment face greater competitive pressure than closed ones. Globalization critics are concerned that this pressure induces countries to lower labor standards in order to remain competitive and retain or attract foreign investment. Defenders of globalization counter that countries that are more closely integrated into global markets are likely to have higher rather than lower standards. This article tests the effect of globalization on a specific labor right, which forms part of what are commonly regarded as core or fundamental labor standards. Employing a new measure of free association and collective bargaining rights, we find that countries that are more open to trade have fewer rights violations than more closed ones. This effect holds in a global sample as well as in a developing country sub-sample and holds also when potential feedback effects are controlled via instrumental variable regression. The extent of an economy’s ‘penetration’ by foreign direct investment has no statistically significant impact. Globalization might not be beneficial for outcome-related labor standards, but it is likely to promote the process-related standard of a right to free association and collective bargaining.

Item Type: Article
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Additional Information: Published 2006 © Elsevier Ltd. LSE has developed LSE Research Online so that users may access research output of the School. Copyright and Moral Rights for the papers on this site are retained by the individual authors and/or other copyright owners. Users may download and/or print one copy of any article(s) in LSE Research Online to facilitate their private study or for non-commercial research. You may not engage in further distribution of the material or use it for any profit-making activities or any commercial gain. You may freely distribute the URL (<>) of the LSE Research Online website.
Divisions: Geography & Environment
Subjects: H Social Sciences > H Social Sciences (General)
Date Deposited: 18 May 2006
Last Modified: 02 Apr 2024 19:42

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