Labor-Management Bargaining and Transfer Price in Multinational Corporations

Laixun Zhao

Canadian Journal of Economics, 1998, vol. 31, issue 4, 817-829

Abstract: In this paper, transfer pricing and its relation with the determination of wages and employment when a subsidiary of the multinational corporation (MNC) is located in a unionized labor market are studied. The author's results suggest that the union prefers to negotiate with headquarters rather than with the subsidiary, while the MNC prefers the opposite, because the MNC can use transfer pricing as a bargaining tool in decentralized labor-management negotiations. Thus, the MNC charges the transfer price differently for the unionized subsidiary than for the profit-maximizing subsidiary. In addition, he conducts several interesting comparative statics analyses.

JEL-codes: F2 P5 (search for similar items in EconPapers)
Date: 1998
References: Add references at CitEc
Citations:

Downloads: (external link)
https://links.jstor.org/sici?sici=0008-4085%281998 ... BATPI%3E2.0.CO%3B2-A (text/html)
only available to JSTOR subscribers

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cje:issued:v:31:y:1998:i:4:p:817-829

Ordering information: This journal article can be ordered from
https://www.economic ... ionen/membership.php

Access Statistics for this article

Canadian Journal of Economics is currently edited by Zhiqi Chen

More articles in Canadian Journal of Economics from Canadian Economics Association Canadian Economics Association Prof. Werrner Antweiler, Treasurer UBC Sauder School of Business 2053 Main Mall Vancouver, BC, V6T 1Z2. Contact information at EDIRC.
Bibliographic data for series maintained by Prof. Werner Antweiler ().