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Has Global Trade Competition Really Led to a Race to the Bottom in Labor Standards

Bibliographic Data

ID6274342
AuthorsAlessandro Guasti (0000-0003-1720-4301, University of Oxford), Mathias Koenig-Archibugi (0000-0003-4637-9477, London School of Economics and Political Science)
Year2022
Volume66
Issue4
Publication date2022-09-15
Peer ReviewedYes
Open AccessYes
TypeARTICLE
VenueInternational Studies Quarterly (JOURNAL)
Journal identifiersISSN: 0020-8833 • E-ISSN: 1468-2478
PublisherOxford University Press (PUBLISHER • GB)
DOI10.1093/isq/sqac061
OpenAlexW4295943263
LanguageEN
Citations received5
References cited50

The possibility that economic competition puts working and employment conditions under pressure is a frequently voiced concern in debates on international trade. We provide an empirical assessment of the argument that competition for world markets has generated a race to the bottom in labor standards. Spatial econometrics is used to identify interdependence in labor practices among trade competitors. We present a strategy for measuring export competition between countries that fulfills several criteria: It reflects actual competition between firms offering similar products, rather than export similarity in relation to a few very broad product categories; it captures not only what competitor countries export but also how much; it takes into account that states are exposed to export competition to different degrees; and it focuses on the downward pressure stemming from a deterioration of labor rights protections among close competitors. To address endogeneity, we implement a two-stage least-squares (2SLS) instrumental variable approach and a difference two-stage generalized method of moments (GMM) approach. We find no evidence that export competition has triggered a race to the bottom in two samples covering most states in the world over nearly three decades. The finding is robust to a variety of alternative specifications

Argument (complex analysis · Competition (biology · Competitor analysis · Econometrics · Economics · Endogeneity · Globalization · Instrumental variable · International economics · International trade · Market economy · Product (mathematics · Race (biology · Race to the bottom · Economic Policies and Impacts · Global trade and economics · Regional Economics and Spatial Analysis

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Unique citing works5
Citations per year5
Citation span2025 - 2026 (2)
Citation velocitycurrent
Highly citedNo
Citation typesNeutral: 5

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