Foreign Direct Investment

Foreign direct investment occurs when a firm invests resources in business activities outside its home country. Many barriers to international trade took the form of high tariffs on imports of manufactured goods. Such tariffs aimed to protect domestic industries from "foreign competition". In addition to reducing trade barriers, many countries have also been progressively removing restrictions on barriers to foreign direct investment (FDI). According to the United Nations, between 1991 and 1996 more than 100 countries made 599 changes …

…to make FDI work for development for all types of workers. * More attention should be focused on the bargaining position of low-skilled workers in a globalizing world. Much of the micro-evidence finds that skilled workers in foreign firms are able to obtain a higher wage premium than low-skilled workers, not necessarily because foreign- owned firms make skilled workers more productive but rather because skilled workers in foreign-owned firms are relatively more effective in wage bargaining.