Journal Articles

Labor Markets and the Demand for Foreign Direct Investment

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Existing research on foreign direct investment (FDI) focuses on how politics influences the supply of FDI inflows. In this article I shift focus to the demand for FDI inflows within recipient countries by examining individual preferences for FDI. I argue that FDI preferences are largely a function of FDI's effects on income. FDI raises wages, especially those of skilled labor because foreign firms require more highly skilled labor than their local counterparts. Accordingly, support for FDI should increase with respondents' skills. Using three years of extensive public opinion data from eighteen Latin American countries, I provide robust evidence that preferences are consistent with FDI's effects on income. There is relatively little support for alternate explanations including concerns about job security, opposition to privatization, and the socializing effects of higher education on economic policy preferences.

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Detail Information

Series Title

International Organization

Call Number

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Publisher

Cambridge : Cambridge University Press., 2010

Collation

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Language

English

ISBN/ISSN

00208183

Classification

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Content Type

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Media Type

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Edition

Vol.64, No.3,July 2010.pp.389-409

Subject(s)

Labor markets and the demand

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