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Journal of Economic Integration 2004 December;19(4) :804-829.
DOI: https://doi.org/10.11130/jei.2004.19.4.804
Export Structure, FDI and Child Labour
Matthias Busse and 
Sebastian Braun 
HWWA Hamburg Institute of International Economics
Copyright ©2004 Journal of Economic Integration
ABSTRACT

The paper addresses the linkage between certain aspects of the increasing economic integration of world markets and the level of child labour. We empirically examine, first, the often-cited conventional wisdom that multinational enterprises invest in countries where the extent of child labour is relatively high and, second, the concern that countries may gain an unfair comparative advantage in trade by using child labour. The results indicate that multinationals are highly sensitive with respect to the location of their transplants and prefer countries with lower levels of child labour. The opposite outcome applies to child labour and comparative advantage in labour-intensive goods, where we find a statistically significant positive relationship. Based on these results, the paper also discusses some policy implications on how to deal with child labour effectively.

JEL Classification: C31, F15, J82

Keywords: Child Labour | Economic Integration | Trade | FDI
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