This paper investigates the effects of multinational corporations on labor standards. We argue that the previous … stylized model of segmented labor markets with equilibrium unemployment where parts of the labor force are willing to accept … reductions in their labor standards to attract job-creating horizontal foreign direct investment. By disentangling US FDI data …

on the volume of inward Foreign Direct Investment. Rigid labor markets result in high adjustment and exit costs which … deter foreign investments. We also find that the deterrent effect of inflexible labor markets is larger for industries with … structural change by tightening labor market regulations which especially deters inflows of FDI into low-skill industries. To …

effect of globalization on labor rights is ambiguous.Empirically, we find little evidence that globalization drives movements … in labor rights in either direction …