Abstract

Labour standards of a country can impact its export performance. Labour standards of the emerging economies and how these standards impact their export performances and in turn, global trade and governance relations have been a bone of contention among trade theorists and analysts. In this chapter, an attempt is made to empirically test the conventional wisdom and belief that low labour standards, which are prevalent in most emerging economies, give a country some advantages in the form of export competitiveness. The chapter also tests if the effect of labour rights on exports is different at different levels of economic growth. Conducting a cross-country regression exercise with country-fixed effects using a panel data set of maximum 163 countries over the years 1980–2014, it was found that although no definite relation can be established between labour rights and export performance, the result could depend on whether it is a poor or rich country. Specifically, if a richer country ratifies more labour conventions, its effects on exports will be less positive than if a relatively poorer country ratifies the conventions.

Highlights

  • Labour interests in high-standards countries argue that low labour standards are an unfair source of comparative advantage, and that increasing imports from lowstandards countries will have an adverse impact on wages and working conditions in high-standards countries, leading to a race to the bottom of standards

  • Many commentators suggest that this is a transformative moment in global history and these economies will bring about structural changes in global production, trade and aid relationships (Brautigam, 2009; Henderson, 2008; Kaplinsky & Messner, 2008; Power, Giles, & Tan-Mullins, 2012; Yeung, 2009)

  • This paper has examined the effects of labour standards on export performance of countries

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Summary

Introduction

Labour interests in high-standards countries argue that low labour standards are an unfair source of comparative advantage, and that increasing imports from lowstandards countries will have an adverse impact on wages and working conditions in high-standards countries, leading to a race to the bottom of standards. Lowstandards countries fear that the imposition of high labour standards upon them is just a form of disguised protectionism and is unfair since it will erode their competitiveness, which is largely based on low labour costs. The objective of this chapter is to empirically investigate the effects of labour standards on the export performance of a country. If the popular views on the issue of trade and labour standards are correct, one should expect low-standards countries to enjoy a better export performance, ceteris paribus. 3 and 4 discuss the data, empirical analysis and results and Sect. The structure of the chapter is as follows: Sect. 2 is an overview of emerging economies and their participation in global standards setting, Sects. 3 and 4 discuss the data, empirical analysis and results and Sect. 5 concludes

Bandyopadhyay
Via Supply-Side Participation
Via Demand-Side Participation
Via Civil Society and State and Private Actors
Description of Data
Results
Conclusion
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