Multinationals' Compliance with Employment Law: An Empirical Assessment Using Administrative Data from Ontario, 2004-2015
Pohler, D., & Riddell, C. (accepted) Multinationals' compliance with employment law: An empirical assessment using administrative data from Ontario, 2004-2015. Industrial and Labor Relations Review.
Do multinational companies comply with the law in a developed country like Canada? Our key findings based on data from Ontario suggest that unions predict compliance across all foreign MNCs, and there are systematic country-of-origin effects on MNC compliance in non-unionized workplaces.
Our study contributes new evidence to the literature on MNC behaviors by exploring three related questions: (1) Do MNCs comply with local employment laws in a developed country? (2) To the extent that compliance varies across MNCs, what factors are important in shaping compliance? (3) Is there a “foreignness” effect for MNCs operating in developed countries, and does this effect vary according to country-of-origin and/or union status? To investigate these questions, we compiled unique firm-level administrative data on MNC compliance with regulatory and quasi-regulatory employment practices during mass layoffs in Ontario, Canada. Adopting a research design that uses the behavior of Canadian MNCs as the comparison group, our key findings suggest that unions are a very robust predictor of compliance across all foreign MNCs, and that there are systematic country-of-origin effects on MNC compliance in non-unionized workplaces.