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Annual Report on the OECD Guidelines for Multinational Enterprises 2008

Employment and Industrial Relations

image of Annual Report on the OECD Guidelines for Multinational Enterprises 2008
The Guidelines for Multinational Enterprises are recommendations to international businesses on conduct in such areas as labour, the environment, consumer protection and the fight against corruption. The recommendations are made by the adhering governments and, although they are not binding, governments are committed to promoting their observance. Part I of this Annual Report provides an account of the actions the 41 adhering governments have taken over the 12 months to June 2008 to enhance the contribution of the Guidelines to the improved functioning of the global economy. Part II of this Annual Report highlights key findings of the High-Level OECD-ILO Conference on Corporate Social Responsibility.

Did you know? As of June 2008, 104,000 Web sites referred to the OECD Guidelines for Multinational Enterprises, compared with 25,000 five years earlier.

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The Impact of Foreign Direct Investment on Wages and Working Conditions

Foreign direct investment (FDI) by OECD-based multinational enterprises (MNEs) in developing and emerging economies has increased dramatically over the past two decades. While generally perceived as beneficial for local development, it has also raised concerns about unfair competition and the protection of workers’ rights in host countries. This paper documents the recent increase in FDI and assesses its effects on wages and working conditions for workers of foreign affiliates of MNEs and those of their independent supplier firms. The evidence suggests that MNEs tend to provide better pay than their domestic counterparts, especially when they operate in developing and emerging economies. The positive impact on wages also appears to spread to the employees of domestic firms that serve as suppliers of MNEs or recruit managers with prior experience in foreign firms, but these spillover effects are small. MNEs also provide more training than domestic firms, but it is unclear whether this reflects a causal impact of foreign ownership. 

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