During the last three decades, developing countries have made enormous strides in opening up their protected domestic markets to international trade and foreign investment. Yet most countries have not simply opened up their markets. They have also instituted a range of policies to encourage...

Critics of globalization claim that firms are being driven to shift employment abroad by the prospects of cheaper labor. Yet the evidence for this, beyond anecdotes, is slim. In this article, we review evidence on whether firms that do business in foreign countries are substituting foreign for...

This paper uses Indonesian data to analyze the impact of foreign ownership on wages. After controlling for worker and firm characteristics, we find that foreign firms pay a wage premium, which is larger for skilled relative to unskilled workers.

In this paper, we disentangle the sources of public sector inefficiency using 1981-1995 panel data on manufacturing firms in Indonesia. We consider two leading hypotheses: (1) public sector enterprises are inefficient due to agency-type problems or (2) public sector enterprises are inefficient...

During her five years at the World Bank, Harrison initiated four studies involving multinational enterprises in four developing countries: Ivory Coast, Mexico, Morocco and Venezuela. These studies measure the role of multinational enterprises in promoting technology transfer; test whether...

During the 1990s, anti-sweatshop activists increased their efforts to improve working conditions and raise wages for workers in developing countries. Indonesia, home to dozens of Nike, Reebok, and Adidas subcontractors, was a primary target for these activists. At the same time, the Indonesian...

Critics of globalization claim that firms are being driven by the prospects of cheaper labor and lower labor standards to shift employment abroad. Yet the evidence, beyond anecdotes, is slim. This paper reports stylized facts on the activities of U.S. multinationals at home and abroad for the...

Many developing countris now actively solicit foreign investment, offering income tax holidays, import duty exemptions, and subsidies to foreign firms. One reason for subsidizing these firms is the positive externalities as foreign technology is transferred from foreign to domestic firms. This...

Drawing on the experience and academic research of the 1990s, this chapter identifies five lessons: • Openness to trade has been a central element of successful growth strategies. In all countries that have sustained growth the share of trade in gross domestic product (GDP) has increased, and...

In an effort to shed some light on the larger question of labor standardsvand globalization, we seek to examine compliance with minimum wage legislation in Indonesia. Indonesia is an ideal case study because the govern ment made minimum wages a central component of its labor market policies in...