Can country continuously compete on cheap labor cost? A system dynamics approach to FDI policy analysis

dc.contributor.authorSamii, Massood
dc.contributor.authorTeekasap, Pard
dc.date.accessioned2010-11-15T19:16:29Z
dc.date.available2010-11-15T19:16:29Z
dc.date.issued2010-06-28
dc.descriptionAuthor's Originalen_US
dc.description.abstractThis paper studies the interaction of FDI, wages and employment of workers under different policies in countries that use cheap labor cost strategies such as Thailand. The interactions are analyzed by using system dynamics modeling. The model simulation shows that FDI drives salaries up when the demand for workers reaches the limit of the working population. A higher salary, in turn, causes low labor cost seeking FDI to withdraw their investment. Government policies aimed to sustain cheap labor cost seeking FDI are examined. Policies to subsidize foreign operation such as providing tax breaks and reducing the time to set up a new firm can stimulate FDI in the short term but in the long term the foreign firms still withdraw their investments due to high salaries. An increase in the working population or a reduction in firm hiring process time, on the other hand, does not affect the volume of FDI. Thus, the country cannot rely on a low labor cost strategy on the long term.en_US
dc.description.bibliographicCitationSamii, M., & Teekasap, P. (2010, June). Can country continuously compete on cheap labor cost? A system dynamics approach to FDI policy analysis. In proceedings from Academy of International Business (AIB) Conference 2010. Rio de Janero, Brazil.en_US
dc.format.extent3049478 bytesen_US
dc.format.mediaTypeapplication/pdfen_US
dc.identifier.urihttps://hdl.handle.net/10474/1312
dc.language.isoen_USen_US
dc.publisherSouthern New Hampshire Universityen_US
dc.relation.requiresAdobe Acrobat Readeren_US
dc.rightsAuthors retain all ownership rights. Further reproduction in violation of copyright is prohibiteden_US
dc.rightsHolderSamii, Massood
dc.rightsHolderTeekasap, Pard
dc.subject.otherforeign direct investmenten_US
dc.subject.otherwagesen_US
dc.subject.othercheap labor costsen_US
dc.titleCan country continuously compete on cheap labor cost? A system dynamics approach to FDI policy analysisen_US
dc.title.alternativeCan country continuously compete on cheap labor cost? A system dynamics approach to foreign direct investment policy analysisen_US
dc.typeConference Paperen_US
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