Week 10: IPE round 2 Flashcards
Title: Labor Markets and the Demand for Foreign Direct Investment
a. Author(s)?
Sonal D. Pandya
or
Pandya 2010
Labor Markets and the Demand for FDI, Pandya 2010
This reading addresses what main issue?
Pandya is interestd in understanding what drives demand for FDI in a country. Most readings typically focus on how politics indlucnes the supply of FDI inflows, but by focusing on demand, the idea is that understanding this dimension of FDI contributes broadly to the theory of FDI demand, and also these findings contribute to reserach on individual prefernces for international economic flows.
Labor Markets and the Demand for FDI, Pandya 2010
What makes this paper different from others?
So the idea behind Pandya’s work is first to establish where FDI comes from. Research has shown that FDI is the internatinal flow of firm-specific capital which include technology, practices trademarked brands etc. FDI comes from productive firms bc their productivity helps offset the costs of multinational production. Also, to realize returns, firms lower priduction costs by pursuing export-oriented FDI, and market-oriented FDI.
Labor Markets and the Demand for FDI, Pandya 2010
What did the author(s) do to address this issue?
To understand the distirbutional effects of FDI, pandya uses a specific factors model of two industries and three factors, capital specific to each othe the two industries is homogenous and labor is mobile betwen the two indiustries (SS - theorem).
FDI increases domestic wages both in developed and less developed countries and market-oriented FDI introduces competition into the local product market, which means that this can result in lower priduct prices thruogh grater market competition bc multinational producers are usually more productive.
To test FDI preferences, pandya uses public opinion data to test the consistency of preferences with predicted distribtuional effects. using latinobarometer and wuestion on do you consider FDI beneficial or harmful to economic development and to what degree to you agree with the phrase” should FDI be encouraged.
Labor Markets and the Demand for FDI, Pandya 2010
What are the major findings of the paper?
Using a series of probit models, pandyashoes that there is a positive and significant relationship between skill level and support for FDI. Showing that the individual preferences for FDI inflows which is consistent with FDIs distributional effects - that FDI inflows increase with skill level.
Labor Markets and the Demand for FDI, Pandya 2010
What are the implications of this paper and their methodology?
This has implications for how politicians in emerging markets can build support for greater international economic integration. For FDI at least this means that individuals are persuseded by the economic benefits of openness
Title: Attitudes toward highly skilled and low-skilled immigration: Evidence from a survey experiment
a. Author(s)?
Hens Hainmueller and michael hiscox
or
Hainmueller and Hiscox 2010
Attitudes toward high/low skilled immigrants, Hainmueller & Hiscox 2010
This reading addresses what main issue?
The authors are interested in understanding anti-immigrant sentiment among native citizens. To gain a better understanding of how labor market compeition and concerns abiout the fiscal burden on public serves affects these views, hainueller and hiscox test this directly using an original survey experiment embedded in a nationwide U.S. survey.
Attitudes toward high/low skilled immigrants, Hainmueller & Hiscox 2010
What makes this paper different from others?
This paper is unique becuase the ackknowledge that the data on why people support or oppose immigration is not suitable for testing the theoretical relationships theyre interested in learning about. Instead, they use individual’s attitudes toward immigration as gather drom a survey experiment in the US.
Attitudes toward high/low skilled immigrants, Hainmueller & Hiscox 2010
What did the author(s) do to address this issue?
So the idea of this empirical analysis is that using the coginitive styles survey they asked them basically if they agree that the US should allow either more highly skilled or low skilled immigrants from other countries to live in the US on a likert scale.
They argue that if concerns about labor market compettion are importatnt in shaping attitudes toward immigration then we;d expect natives should oppose immigrants with different skill levels using educaional attainment as the measure.
What are the major findings of the paper?
The authors find that regardless of skill highly skilled immigrants are preferred but generally their results are at odds with the claim that concerns about labor market competition are a diriving force in shaping attitudes toward immigration. Instead they suggest that poeple with levels of higher education are more likely to facor immigration regardless of immigrant skill attributes
They also formally test the labor market competiion model as well and the fiscal burdgey model which suggest that the effect of immigration on natives is a fucntion of the natives’ income.
They find that both highly skilled an low skilled respondednt prefer highly skilled immigrants over low skill immigrants and this is not decreaseing in respondents skill levels. Suggesting that concerns about labor market competition are not a powerful driver of ani-immigrant sentiment in simple ways. For the fiscal burden model they also find that rich natives oppose lowskilled immigration more than do poor natives and this difference should be larger in states with fiscal exposure in terms of immigrant access to public service. Rich and poor natives are equally opposed to low-skilled immigration in genearl
