Labor Rights and Foreign Direct Investment in Latin America: The Empirical Analysis of Proximity Hypothesis

Author

Cesar H. Villegas, The University of Texas Rio Grande Valley

Date of Award

5-2020

Document Type

Thesis

Degree Name

Master of Arts (MA)

Department

Political Science

First Advisor

Dr. Dongkyu Kim

Second Advisor

Dr. Paul Jorgensen

Third Advisor

Dr. Monica Clua Losada

Abstract

What impact do labor rights practices have on foreign direct investment (FDI) in Latin America? While existing research shows how participation in the global production network influences host country’s labor standards, few studies delve into reversed causal mechanisms whereby changes in labor standards affects FDI inflows. While conventional wisdom says protection of labor rights has negative influence on FDI, I argue that for Latin American countries, practical protection of labor rights attracts FDI. Practical protection of labor right acts as a proxy and signals that host government could protect foreign assets that are under the risk of expropriation. I expect practical increase in labor rights positively affects FDI over time. Utilizing data of 30 Latin American countries and 128 non-Latin American developing countries from 1994 to 2012, and an error correction model shows that de facto labor rights protection has a long-term effect on foreign direct investment in Latin America.

Comments

Copyright 2020 Cesar Villegas. All Rights Reserved.

https://go.openathens.net/redirector/utrgv.edu?url=https://www.proquest.com/dissertations-theses/labor-rights-foreign-direct-investment-latin/docview/2423427779/se-2?accountid=7119

Recommended Citation

Villegas, Cesar H., "Labor Rights and Foreign Direct Investment in Latin America: The Empirical Analysis of Proximity Hypothesis" (2020). Theses and Dissertations. 790.
https://scholarworks.utrgv.edu/etd/790