The effect of worker rights on the attraction of foreign direct investment
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This thesis examines the relationship between the amount of foreign direct investment (FDI) attracted to a state as a result of that state’s respect for six worker rights: Compulsory Labor, Minimum Age, Reasonable Working Hours, Association and Collective Bargaining, Minimum Wage, and Occupational Safety and Health. I theorize that states with strong respect for lower cost worker rights will attract FDI while states with strong respect for higher cost worker rights will deter FDI. In accordance with my theory, I find that respect for Minimum Age rights is positively associated with FDI inflows and respect for Occupational Safety and Health rights in developing countries is negatively associated with FDI inflows. This analysis suggests that worker rights conditions within a state do in fact influence multinational corporations’ investment decisions.