Unions and the Welfare Impact of Foreign Direct Investment — A Wisdom Extension
Jacques Bughin and
LABOUR, 2003, vol. 17, issue 2, 285-298
Abstract. This paper extends the recent literature, e.g. Leahy and Montagna (Economic Journal 110: 80–92, 2000), in relation to the link between unionization, inward foreign direct investment (FDI) and country welfare in an oligopoly market structure. It is shown that the common results, that unions may reduce welfare under FDI while multinational enterprises (MNEs) will strictly trade off union wages at each location, are generally driven by the assumption relating to the scope of the bargaining with the union, namely the ‘right to manage’ (RTM). In particular, our extension to efficient bargaining (EB) demonstrates that union power may increase welfare in the presence of FDI, while the MNEs’ choice between FDI and exports will include profit‐sharing arbitrage with unions, in addition to the usual wage comparison considerations.
References: Add references at CitEc
Citations: View citations in EconPapers (4) Track citations by RSS feed
Downloads: (external link)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:bla:labour:v:17:y:2003:i:2:p:285-298
Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=1121-7081
Access Statistics for this article
LABOUR is currently edited by Franco Peracchi
More articles in LABOUR from CEIS Contact information at EDIRC.
Bibliographic data for series maintained by Wiley Content Delivery ().