Local Labor Research Articles

One region's gain is another's loss: The impact of market segmentation on renewable energy development in China

Current research has focused on the effects of policy and economic factors on renewable energy (RE) development but has ignored the effects of market segmentation. We developed a two-stage Cournot equilibrium model to explore the relationship between the market segmentation behaviors of local governments and their effects on RE development. We empirically tested the spatial effects of market segmentation by using a spatial Durbin model based on panel data of Chinese provinces from 2006 to 2020. The results are as follows. (1) There are positive spatial dependences among the RE development in the provinces. Most provinces show a “high-high” or “low-low” spatial agglomeration pattern. (2) Market segmentation caused by local protection can promote local RE development but significantly inhibits the development of RE in neighboring regions, i.e., one region's gain is another's loss. The inhibition is much greater than the local development, thus hindering overall RE development. (3) Regions with more stringent environmental regulations have greater incentives to adopt the market segmentation strategy in order to promote local RE development. (4) Market segmentation can increase the degree of local capital and labor mismatch, thereby promoting local RE development and hindering RE development in neighboring regions.

Regional resilience and the network structure of inter-industry labour flows

ABSTRACT This paper explores how the network structure of local inter-industry labour flows relates to regional economic resilience across 72 local labour markets in Sweden. Drawing on recent advancements in network science, we stress test these networks against the sequential elimination of their nodes, finding substantial heterogeneity in network robustness across regions. Regression analysis with least absolute shrinkage and selection operator (LASSO) in the context of the 2008 financial crisis indicates that labour flow network robustness is a prominent structural predictor of employment change during crisis. These findings elaborate on how variation in the self-organisation of regional economies as complex systems makes for more or less resilient regions.

Institutional Quality and Internationalization: Empirical Evidence from Manufacturing SMEs in Vietnam

This paper assesses how the local institutional environment affects the internationalization of manufacturing small- and medium-sized enterprises (SMEs) in Vietnam, exploiting a multi-dimensional institutional index and large-scale enterprise data. The authors find that the internationalization of manufacturing SMEs was influenced by several institutional aspects, such as the transparency of local authorities, access to land, informal charges, and local labor policies. Improvements in these institutional aspects can substantially enhance participation in international trade and its magnitude. This pattern diverges from their large and foreign counterparts, whose trade participation is primarily affected by land access and the transparency of local authorities. Additionally, the authors find heterogeneous effects of the institutional environment on SMEs in different manufacturing industries. Heavy industries rely more on the costs of entry and time costs, while land access is crucial for SMEs in manufacturing industries that require large-sized factories. Our findings suggest that the government should provide a supportive institutional environment to SMEs, which will lead to higher international participation and boost domestic economic growth.

Seeking ambidexterity through hyperautomation: What next for GBA logistics in their evolution from local labour entrepreneurs to global players in logistics

Based in the Northwest of England, GBA Logistics (GBA) is a global logistics provider focussing on the transportation of goods. Founded in 1987 as GBA Services, this family firm has transformed from being a provider of labour for local companies, to a major player within the national and international logistics sector, now ranking in the top 50 operators in the UK. Starting as a sole trader, GBA became a limited company in 2000 and now employs around 400 staff across 16 locations in the UK and Europe. Working in a highly competitive, dynamic environment, the company constantly faces the challenge of optimising its existing services whilst needing to explore new opportunities to meet the changing demands of its clients. Balancing these two opposing requirements is known as organisational ambidexterity. Part of GBA’s strategic response to this challenge, is to explore how it can employ advanced technologies such as artificial intelligence and robotic process automation to enhance its efficiency and effectiveness, whilst identifying novel ways to adapt to market conditions. The application of these emerging technologies to automate and optimise operations is known as hyperautomation. For GBA, striking a balance between offering standardisation versus a customised service to customers is increasingly crucial to its success. However, this family firm’s underlying culture of entrepreneurial spirit and adaptability together with its commitment to remain relevant and competitive in logistical services means it is keen to explore how it can exploit hyperautomation to achieve its aim of organisational ambidexterity.

International Migration, Xenophobia and Migrant Employment in Rural Areas: Konya Example

This study examines the problems arising from that the agricultural sector has become a significant employment area for migrant labor due to migrant migration. The presence of migrant labor in the agricultural sector has increased because of the cost advantages provided by agricultural operators of cheap labor supply despite informal working conditions. Migrant labor has crucial contributions to the sustainability of production activities, especially in the agricultural sector, where the local labor does not want to be employed. However, the perspective of local people toward migrants differs over time, especially due to different social and cultural characteristics. Since these differences are more noticeable in small settlements, such as rural areas people who are migrant to society or national identity become unwanted in the living spaces of local people over course of time, this study aimed to determine the perspective toward migrant labor and to evaluate the impact of this situation on the sustainability of production. In line with the results obtained, policy recommendations were made for the integration of migrant labor and the planning of agricultural activities.

The flip side of the China syndrome: Local labor market effects in China

AbstractUS–China trade is widely thought to have contributed significantly to the decline in US manufacturing employment, sometimes called the China syndrome. Flipping the point of view, we examine its impact on Chinese local labor markets between 2000 and 2010. In prefectures most exposed to export growth, there is a pronounced increase in manufacturing employment, primarily among young, low‐educated, rural people and more for blue‐collar workers. Beyond manufacturing, there is a decline in agricultural, yet an expansion in service employment, exhibiting substantial heterogeneity across demographics. The export‐driven structural transformation is profound and long‐lasting out to 2020. Among nonworking people, export growth primarily increases school attendance and the share of people relying on family support, suggesting an income effect.

IMPACT OF TRAINING SATISFACTION ON EMPLOYEE WORK PERFORMANCE: SENSE OF BELONGING AS MEDIATING VARIABLE

Recently, with the changes in the international economic and political situation and China's policy support, many Chinese companies have set their sights on Southeast Asia, especially Thailand. In Thailand, many Chinese-funded enterprises choose to settle here due to factors such as geographical advantages, friendly relations, and government investment policies. However, when recruiting local labor, these companies face some challenges, such as high employee turnover rates after training and the unsatisfactory work performance of Thai employees. In order to explore solutions, this study took four Chinese-funded companies in Thailand as examples and conducted a questionnaire survey on Thai employees, including a total of 46 questions. According to regression analysis of the data, there is a positive relationship between training satisfaction, sense of belonging, and job performance, but the correlation is not very significant. Therefore, the study suggests that companies should pay attention to cultivating employees' sense of belonging to reduce turnover and balance short-term performance and employee care in management to promote long-term development.

Resource redeployment as an entry advantage in resource‐poor settings

AbstractResearch SummaryScarcity of productive factors poses a challenge for firms entering underdeveloped regions. We theorize that incumbent firms can overcome scarcity of skilled human capital in local labor markets by redeploying workers from existing units. We predict that redeployment is more valuable when factor markets exhibit large differences in resource scarcity. Redeployment is also more valuable when output is highly sensitive to worker skill and is responsive to complementarities between labor and other inputs. Important implications are that redeployment can endow firms with superior resources and enable them to enter more markets. Data on sugar mills in Brazil, where a sudden demand boom incentivized expansion, corroborate the predictions. Our research identifies a new mechanism of value‐creation from resource redeployment across factor markets.Managerial SummaryFirms entering underdeveloped regions often struggle to obtain inputs needed for production, such as skilled labor. We propose that incumbent firms expanding into such regions can overcome resource scarcity by redeploying resources from their existing units. Redeployment allows firms to move resources—such as skilled workers—from markets where resources are relatively abundant to markets where they are scarce. We show that such factor market “arbitrage” is most valuable when firms operate across markets with large differences in resource scarcity and when production is sensitive to worker skill and to complementarities between inputs. By redeploying into markets suffering from resource scarcity, firms can enter more markets and seed units with superior resources. This gives incumbent firms with redeployment capabilities an advantage over de novo entrants.

Social Networks and Brexit: Evidence from a Trade Shock

Regional exposure to Chinese import competition has often been linked to support for the Leave option in the 2016 UK EU membership referendum. Looking at 143 harmonised International Territorial Level 3 (ITL3) regions covering England and Wales, and using data on the density of online social ties between them, I show that regional support for leaving the EU was also associated with exposure in socially connected regions. I first delineate 18 commuting zones based on interregional flows over three Census years. For each region, I then construct a measure of own exposure to Chinese import competition and a measure of exposure in a set of social neighbours located outside its commuting zone. Exploiting variation within commuting zones, and using an instrumental variable approach, I find that the two measures have comparable positive effects on the regional share of the Leave vote. In a series of checks, I do not find evidence that the effect of social neighbours’ exposure is driven by an economic channel or a relationship between import competition and social ties. I also corroborate the regional results using survey data on vote choice. I interpret these findings as indicative of social spillovers between local labour markets: information flows from social neighbours are a likely channel behind the estimated spillover effects on voting outcomes.

County-level industrial composition of the labor force and drug overdose mortality rates in the United States in 2018-2021.

Drug mortality risks vary among industries, creating distinctive geographic patterns across US counties. However, less is known about how local labor market structure relates to drug overdose mortality amid the synthetic opioid era in the United States. This study investigates the relationship between industry-specific job composition and drug overdose mortality at the county level while exploring how fentanyl's presence in illicit drug supplies may moderate the relationship. Data were derived from the National Center for Health Statistics' Multiple Cause of Death files for the rates of drug overdose mortality of any intent, linked with four other sources on industry-specific job shares, drug supply, and county-level sociodemographic characteristics and opioid prescribing rates from the US Census Bureau, the CDC, and the Drug Enforcement Administration. Negative binomial regression models were employed to examine associations between county industry-specific job composition and drug overdose mortality, with tests for moderating effects of state-level fentanyl seizure rates. Our models indicate negative associations between job shares of manufacturing, retail trade, and educational services industries and drug overdose mortality. Positive associations were found for arts/entertainment/recreation and public administration. State-level fentanyl seizure rates had moderating effects on administrative/support/waste management/remediation (A/S/WM/R) and educational services. Counties with a higher concentration of arts/entertainment/recreation and public administration jobs need targeted efforts to mitigate drug-related overdose risks. Additionally, areas with higher concentrations of A/S/WM/R service jobs, particularly where fentanyl seizure rates are higher, may require proactive harm reduction strategies for reducing overdose risks.

Impacts of Forced Immigration: The Venezuelan Diaspora and the Brazilian Labor Market

ABSTRACT This article estimates the impact of immigrant influxes on local labor markets, taking advantage of a natural experiment generated by a massive wave of forced migration of Venezuelans to Roraima, a state in northern Brazil, from 2016 onward. Estimates show that a 1% increase in the share of migrants in the state population due to immigration resulted in 1.1% higher earnings for native workers in the formal sector, 0.3% fewer hours worked weekly, and 2.3% higher wages. Results are confirmed by employing a synthetic control method.

Estimating Who Benefits from Productivity Growth: Local and Distant Effects of City Productivity Growth on Wages, Rents, and Inequality

Abstract We first estimate the direct effects on local workers’ earnings and housing costs from increases in local labor demand caused by gains in city-level manufacturing productivity. We find that local workers benefit from productivity growth, even after subtracting increases in housing costs. These gains are larger for local less educated workers, such that productivity growth reduces local inequality. We then propose and implement a new transparent method of estimating indirect effects of local productivity growth on earnings and housing costs of workers in other cities. We find that these general equilibrium effects are economically important and disproportionately benefit college-educated workers.

Migration and natives' inequality: Evidence from Italian local labor markets

AbstractUsing individual data from the Italian Labor Force Survey, we investigate the impact of immigration on the Gini index and the percentile ratio (p90/p10) at the household level within Labor Market Areas (LMAs) in Italy from 2008 to 2018. To identify the effect of immigration we construct a composite index based on demographic and occupation‐related characteristics that captures the degree of similarity between immigrants and natives across LMAs. This approach addresses the limitations of the standard cell segmentation method and allows us to estimate the impact of immigration on the entire distribution of natives' earnings. To address endogeneity concerns we use an instrument proposed by Card, which exploits the tendency of immigrants to migrate to areas with a pre‐existing group of immigrants of the same ethnicity. Our findings show that immigration reduces income inequality among natives and the effect is larger in those LMAs where the degree of similarity between immigrants and natives is higher. We also find that immigration has a positive effect on natives' labor income in occupations that require language skills, while the effect is not significant in low/no skilled jobs that only require basic language skills, or highly skilled jobs where interaction between immigrants and natives is limited.

Sweatshops and Labour Law: The Ethical and Legal Implications of Ignoring Labour Law in Developing Countries

Abstract Academic defenders of sweatshops argue that disregarding labour rights will result in increased welfare in the developing nations where transnational corporations (TNCs) operate. They argue that TNCs should ignore local labour laws in the best interests of the poor. In this article we criticise this ‘ignore the law’ position regarding sweatshops on three separate grounds. First, it fails to acknowledge the demands for businesses to respect the rule of law as part of the development process. Second, it utilises an inadequate account of voluntary contractual bargaining which overlooks how employment practises operate in sectors prone to utilising sweatshop labour, leading to coercive employment conditions incompatible with human dignity and free choice. Third, it fails to adequately account for labour law and international labour standards, which embody a strong moral conception of dignity at work and observance of fundamental human rights in protecting workers against abuse through the resulting legal duties placed on states and corporate actors. We conclude that poverty reduction requires the support of both private and public actors. Advocating the side-stepping of labour laws distracts from the important work of institution building necessary to protect workers and facilitate economic growth consistent with decent work, sustainable development, fairness and human dignity as embodied in international labour standards.

Repurposing coal plants—regional economic impacts from low carbon generation

Repurposing coal power plants in the United States may provide significant opportunities to incentivize low-carbon and renewable electricity generation created by the Inflation Reduction Act (IRA). Re-using coal sites for their existing electric grid interconnections and infrastructure could reduce costs and provide benefits to coal-based communities experiencing energy transitions. This study estimates local employment, labor income, and tax revenue effects from renewable and low-carbon generation options repurposing coal power plants and meeting their economic impacts at existing coal plant sites in North Carolina. The study bridges gaps in energy transition studies by including site feasibility assessment of advanced reactors for former coal power plant sites, renewable electricity generation, and thermal energy storage. It also considers cost advantages of reusing existing power plant interconnections, IRA discounts, and generation technology economic impacts using IMPLAN. A least-cost quadratic optimization model considers different site-specific electricity generation portfolios to analyze site-based economic impacts and associated technology costs meeting or exceeding site-based coal generation and its economic impacts. This study finds that replacing coal generation costs less than maintaining the current coal fleet, a technology-inclusive portfolio provides the least-cost pathway, and benefits may exceed site-based impacts of existing coal plants. Local tax revenues from advanced reactors and thermal energy storage systems may increase revenues by at least $28 million. Across all repurposing scenarios, replacing existing coal plants with energy storage, renewable, and low-carbon generation leads to net employment growth and tax revenues, indicating further benefits to a rapid and more equitable decarbonization through economic development.

Youth employment amid successive crises and the low-carbon transition: The case of Εurozone coal regions

Over the last decade, the EU has entered a phase of transition to a low-carbon economy, which has led to a decline in the competitiveness of coal. Despite efforts to restructure their energy sectors, coal regions continue to struggle with the lingering effects of the 2008/09 Global Crisis and the Covid-19 pandemic, which affect their economies and decarbonisation trajectories. In this context, the paper examines the role of youth in the local labour regimes (LLRs) of Eurozone coal regions. Drawing on perspectives of Geographical Political Economy and Political Ecology, the transition from coal to renewable energy is conceptualised as a new socio-ecological fix, reflecting capitalist mechanisms seeking novel avenues for profiting while maintaining established power asymmetries and inequalities. The study employs a mixed methods approach to examine the exacerbated structural challenges faced by youth. Firstly, by analysing secondary macroeconomic, (youth) employment and demographic data, key differences between the LLRs of the coal regions of six Eurozone countries are highlighted. Secondly, a qualitative analysis of Western Macedonia in Greece, one of the most lagging coal regions, is carried out. The analysis is based on primary data collected in focus groups and interviews with key informants, energy workers and locals in the period 2021-2022. Findings suggest that uneven development, labour flexibilisation, and lack of economic diversification hinder the entry of young people into the labour market and contribute to their out-migration from coal regions, thus the latters' role in shaping the changing energy landscape remains marginal.

The Impact of Tanjung Karang Tourism Village on Local Labor Absorption: A Case Study on Loang Baloq Tourism, Mataram City

This study aims to analyze the impact of the existence of Tanjung Karang tourism village on local employment in Tanjung Karang, Mataram City. The business units in this study are Grocery Micro Small Medium Enterprises, Souvenir Micro Small Medium Enterprises, Fish Culinary Center Micro Small Medium Enterprises, and Homestays. This research uses a qualitative method with a descriptive approach. Data were obtained through observation, interviews, and documentation. Informants were selected using purposive sampling technique. Data analysis used the Miles and Huberman model, namely reducing data, displaying data, and drawing conclusions. The results found that the impact of the existence of the Tanjung Karang tourism village with the Loang Baloq Park tourist attraction on the absorption of local labor in Tanjung Karang is still relatively low. It can be seen from the number of workers who work as owners of Micro, Small and Medium Enterprises that are more often not selling and have not even been seen selling again for a long time, preferring to work elsewhere and there are also some who are unemployed. Homestay owners also experience obstacles such as a lack of interest from tourists to stay overnight due to the unattractive form of community housing and a community culture that is prone to social unrest due to the presence of tourist lodging in community homes. These conditions make employment in Tanjung Karang tourism village relatively low.

E-commerce and foreign direct investment: pioneering a new era of trade strategies

This study explores the dynamic interplay between foreign direct investment, e-commerce, and China’s export growth from 2005 to 2022 against the backdrop of the rapidly evolving global economy. Utilizing advanced analytical models that combine province- and year-fixed effects with fully modified ordinary least squares and dynamic ordinary least-squares methodologies, we delve into how foreign direct investment and e-commerce collectively boost China’s export capabilities. Our findings highlight a significant alignment between China’s export expansion and the global sustainable development agenda. We observe that China’s export growth transcends mere international investment and digital market engagement, incorporating sustainable practices such as effective utilization of local labor resources and an emphasis on technological advancements. This study also uncovers how knowledge capital and educational attainment positively impact export figures. A notable regional disparity is observed, with the eastern regions of China being more responsive to foreign direct investment and e-commerce influences on export trade compared to their western counterparts. This disparity underscores the need for region-specific policy approaches and sustainable strategies to evenly distribute the benefits of foreign direct investment and e-commerce. The study concludes that while foreign direct investment and e-commerce are crucial for China’s export growth, the underlying theme is sustainable development, with technological innovation and human capital being key to ongoing export success. The findings advocate for policies that balance economic drivers with sustainable development goals, ensuring both economic prosperity and environmental sustainability.

The Impact of Economic Incentives on Small and Medium Enterprises in Oman During COVID-19: Applied Study, Case of Dhofar Governorate in Oman

The study examined the impact of economic inducement on small and medium enterprises (SMEs) in Dhofar Governorate, Oman, during the COVID-19 pandemic. Two variables were adopted: economic incentives as the independent variable and the recovery of SMEs as the dependent variable. Three dimensions were adopted to evaluate the economic incentives experienced by small and medium enterprises, which are “facilitation of granting loans,” “reducing taxes and fees,” and “technical assistance.” The study population consisted of the employees of 8 SME companies. Primary data was collected from a convenient sample of 104 via electronic questionnaire (due to the directives related to social distancing in light of the global health crisis (Covid 19). Data were evaluated through Statistical Packages for Social Sciences SPSS. The study found a strong correlation (90.9%) between economic incentives and the recovery of minor and medium enterprises. Key factors such as facilitating loans, reducing taxes and fees, and providing technical assistance had a strong impact (82.1%) on their recovery. The Omani government should prioritize projects based on local labor and supply chains to reduce leakages and create short-term jobs, enhancing household income during the pandemic. The study facilitates data analysis and obtaining clear results of the impact of economic incentives by using a descriptive-analytical method.Governments must execute fiscal and procedural stimulus to regain lost yield potential from COVID-19, considering the macroeconomic context, monetary policy, debt, trade globalization, and SDGs.

Agricultural mechanization and the performance of the local Chinese economy

In this study, we analyze the impact of agricultural mechanization on the local Chinese economy from 2010 to 2020. Findings based on panel data and instrumental variable methods show that agricultural mechanization led to a significant decline in the local gross domestic product. In particular, agricultural mechanization changes the sector’s production and lowers its output value. Agricultural mechanization has reduced the need for labor to such an extent that young Chinese tend to seek jobs in the non-farming sector, leading to a fall in the local agricultural labor supply and household consumption, adversely affecting the development of local industries and service sectors. Mechanization has also led to cash crops being increasingly replaced by grain crops, reducing the total agricultural output. Finally, this paper presents some policy suggestions for agricultural production and rural development.