Poach or Train Workers?: The Impact of Foreign Direct Investment on Local Labor Market
This analysis draws on a new survey conducted on Myanmar manufacturing firms from 2013 to 2015
There is a long-standing debate over the impact of global trade on workers and firms in developing countries. In this paper the author investigate the causal effect of exporting on working conditions and firm performance in Myanmar. The author uses the rapid opening of Myanmar to foreign trade after 2011 alongside identification strategies that exploit product, geographic and industry variations to obtain causal estimates of the impact of trade. The author finds that exporting has large positive impacts on working conditions in terms of improved fire safety, health-care, union recognition, and wages. Results also indicate that exporting increases firm sales, employment, management practice scores, and the likelihood of receiving a labor audit, which is typically required by foreign buyers.
This research was funded under the Private Enterprise Development in Low-Income Countries (PEDL) Programme
Tanaka, M. Exporting Sweatshops? Evidence from Myanmar. (2016) 46 pp