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

Indian Journal of Industrial Relations

Volume 55 Issue 1

Published: 2019
Author(s) Name: Yu-Cheng Lai, Santanu Sarkar | Author(s) Affiliation: Department of Finance, Shih Chien University, Kaohsiung Campus, Taiwan
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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.

Keywords: N.A.

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