Regime Shopping

Posted in Human Resource Terms, Total Reads: 558

Definition: Regime Shopping

Regime shopping is when a multinational company (MNC) selects another country for investment based on its employment laws and industrial relations. Regime shopping is a way to expand business operations overseas by investing in other countries.

Regime shopping gives multinational companies a mobility of investment with regard to the employment systems of the company. In regime shopping MNC’s look for countries where employment system is very amenable. TNC’s mainly look for countries where cheap labor is available easily and in large numbers. They also look for countries where the regulations for doing business are less and employer friendly.

This can be very disadvantageous to such employer friendly nations as this may lead to these countries getting less FDI since large MNC firms export their labor leading to a change in employment levels in such countries. Also it may be a threat if the trade unions of such countries become aware of these consequences.

Hence, this concludes the definition of Regime Shopping along with its overview.


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