Their working conditions remain those of their country of origin and the companies thereby position themselves better than domestic companies in regards to social costs. Moreover, legislative competition is a phenomenon that occurs when, in a situation of legislative disparity as described above, governments want to attract foreign companies by reducing labour rights (lower wages or increased facilitation of dismissal).
Por otro lado, la competencia normativa es un fenómeno que se produce cuando, en la situación de disparidad normativa antes descrita, los gobiernos pretenden atraer a empresas extranjeras a través de la reducción de derechos laborales (salarios inferiores o facilitación del despido).