Indian Journal of Industrial Relations: Economics & Social Dev.

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Labor Legislation, Educated Labor & Foreign Direct Investment in Manufacturing in Taiwan


Affiliations
1 Department of Finance, Shih Chien University, Kaohsiung Campus,372 Minchuing Second Road, Kaohsiung 806, Taiwan, Province of China
2 XLRI Jamshedpur, School of Business and Human Resources,Jamshedpur 831001, India
     

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This study shows that educated labor is an important factor for output spill over and the sectors or firms in Taiwan with higher percentage of educated workforce have exerted a greater pull on foreign investment, whereas the local Taiwanese firms with higher percentage of educated workforce were unlikely to invest abroad. It was found that initially both foreign and domestic firms have reduced their investments when government introduced new legislations to regulate working conditions and employment practices in Taiwan. But when the government continued introducing more stringent labor standards, the country witnessed an upsurge in inflows of investment over a period of time and the domestic firms began investing abroad instead of concentrating in the home country.
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  • Labor Legislation, Educated Labor & Foreign Direct Investment in Manufacturing in Taiwan

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Authors

Yu-Cheng Lai
Department of Finance, Shih Chien University, Kaohsiung Campus,372 Minchuing Second Road, Kaohsiung 806, Taiwan, Province of China
Santanu Sarkar
XLRI Jamshedpur, School of Business and Human Resources,Jamshedpur 831001, India

Abstract


This study shows that educated labor is an important factor for output spill over and the sectors or firms in Taiwan with higher percentage of educated workforce have exerted a greater pull on foreign investment, whereas the local Taiwanese firms with higher percentage of educated workforce were unlikely to invest abroad. It was found that initially both foreign and domestic firms have reduced their investments when government introduced new legislations to regulate working conditions and employment practices in Taiwan. But when the government continued introducing more stringent labor standards, the country witnessed an upsurge in inflows of investment over a period of time and the domestic firms began investing abroad instead of concentrating in the home country.

References