Trade, FDI and Labour Standards in Developing Countries, Can consumers have a role?
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2018-08-01
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en
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Abstract
This paper analyses how public awareness about labour conditions among consumers moderates the effect of FDI on labour standards in developing countries. The hypothesis presented is that an increase in consumer awareness in importing countries will have a positive moderating effect on the impact of FDI on labour conditions in exporting countries. It uses a theoretical foundation based on the already existing literature on the topic to demonstrate how consumer awareness might affect labour conditions. The main hypothesis is empirically tested using a panel data analysis, which includes a set of 90 developing countries over a period of 18 years. Consumer awareness is proxied by both the number of humanitarian NGOs present in a country and the amount of fair trade coffee beans sold in the Netherlands. The main results indicate that, for both proxies, the main hypothesis is rejected, revealing that consumer awareness does not have the power to moderate the relationship between FDI and labour conditions, demonstrating that through this channel, consumers do not play a role.
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Faculteit der Managementwetenschappen