The conventional wisdom is that increasing globalisation requires a reduction in the provision of the welfare state among
industrialised countries as the distortions resulting from this type of expenditure undermine international competitiveness
and the ability of countries to attract and/or retain industries. However, there are empirical observations and theoretical
models that are not in line with this conventional wisdom. We will carry out an empirical study using multi-country data for
selected OECD countries to investigate the link between two aspects of globalisation, namely international competitiveness
and foreign direct investment, and the size of government expenditure on social policies. The paper will also take into account
theoretical arguments and empirical evidence from related studies.
Forschungsbereich:Arbeitsmarkt, Einkommen und soziale Sicherheit