The Twin Effects of Globalization

Employees of "globalized" firms face a riskier, but potentially more rewarding, menu of labor market outcomes. The authors document this neglected tradeoff of globalization for a sample of Indian manufacturing firms. On the one hand, the employees of firms subject to foreign competition face a more uncertain stream of earnings and riskier employment prospects. On the other hand, they enjoy a more rapid career growth and have more opportunities to train and upgrade their skills. The negative uncertainty costs and the positive incentive effects of globalization are thus twin to each other. Concentrating on just one side of the coin gives a misleading picture of globalization.

Bibliographic Details

Main Authors:	Daveri, Francesco, Manasse, Paolo, Serra, Danilo
Language:	English en_US
Published:	World Bank, Washington, DC 2003-10
Subjects:	AGRICULTURE, BALANCE OF PAYMENTS, CAPITAL GOODS, CAPITAL MARKETS, COMPARATIVE ADVANTAGE, COMPETITORS, CONSUMERS, CORPORATIONS, DUMPING, ECONOMETRIC ANALYSIS, ECONOMIC INTEGRATION, ELASTICITY, ELASTICITY OF SUBSTITUTION, EMPLOYMENT, EQUILIBRIUM, EXPANSION, EXPECTED UTILITY, EXPORTS, FIRM SIZE, FIRMS, FOREIGN COMPETITION, GDP, GROWTH RATE, HUMAN CAPITAL, IMPERFECT COMPETITION, IMPORT QUOTAS, IMPORTS, INCENTIVE EFFECTS, INCOME, INSURANCE, JOINT VENTURES, LABOR MARKETS, LEGISLATION, LEISURE, LICENSING, MARGINAL PRODUCT, MARGINAL VALUE, MARKET COMPETITION, MARKET LIBERALIZATION, OWNERSHIP STRUCTURE, PRESENT VALUE, PRODUCERS, PRODUCTION FUNCTION, PRODUCTIVITY, PRODUCTIVITY GROWTH, PUBLIC ENTERPRISES, PURCHASING POWER, REAL WAGES, RISK AVERSION, SUPPLIERS, TARIFF BARRIERS, TAX RATES, TECHNOLOGY TRANSFERS, TERMS OF TRADE, TIME SERIES, TRADE LIBERALIZATION, UNEMPLOYMENT, UTILITY FUNCTION, WAGE DIFFERENTIALS, WAGE RATES, WAGES, WORLD TRADE ORGANIZATION GLOBALIZATION, BUSINESS ENVIRONMENT, RISK MANAGEMENT, LABOR MARKET NEXUS, MANUFACTURING ENTERPRISES, CASE STUDIES, FOREIGN INVESTMENTS, COMPETITION UNFAIR, EARNINGS CAPACITY, EMPLOYEE RIGHTS, CAREER DEVELOPMENT, SKILLS, GLOBALIZATION, WORLD TRADE ORGANIZATION, WTO, trade and wages,
Online Access:	http://documents.worldbank.org/curated/en/2003/10/2778573/twin-effects-globalization https://hdl.handle.net/10986/18049
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