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The Strathprints institutional repository is a digital archive of University of Strathclyde's Open Access research outputs. Strathprints provides access to thousands of Open Access research papers by University of Strathclyde researchers, including by Strathclyde researchers from the Department of Computer & Information Sciences involved in researching exciting new applications for mobile and smartphone technology. But the transformative application of mobile technologies is also the focus of research within disciplines as diverse as Electronic & Electrical Engineering, Marketing, Human Resource Management and Biomedical Enginering, among others.

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Multinational Firms: Easy Come, Easy Go?

Wooton, I. and Haaland, J.I. and Faggio, G. (2003) Multinational Firms: Easy Come, Easy Go? FinanzArchiv, 59 (1). pp. 3-26. ISSN 0015-2218

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Abstract

It is often argued that countries with more flexible labor markets are better placed in attracting inward investment from multinational firms (MNEs). This is an issue when there is uncertainty in the marketplace and the firm faces some risk of closure of its branch plant. We study the MNE's location choice, explicitly taking into account exit, as well as entry, costs. We show that worker protection, through lay-off rules, deters potential investment in risky industries. Using evidence on MNE investment in Eastern Europe, we find support for our prediction that labor-market flexibility makes a location more attractive to the MNE.