Temporary social dumping, union legalisation and FDI: a note on the strategic use of standards

Dermot Leahy and Catia Montagna

The Journal of International Trade & Economic Development, 2001, vol. 9, issue 3, 243-259

Abstract: This paper analyses the welfare implications for a developing country of using union legalisation as a policy instrument to attract inward foreign direct investment. While its presence may discourage a foreign multinational (MNE) from locating in the host country, unionisation is an important rent-extracting instrument for the host country. We show that if the MNE benefits from dynamic effects, the host country government may have an incentive to adopt temporary social dumping: banning the union in the short run to extract higher rents in the future. However, if the government can use a fiscal instrument in conjunction with union legalisation, the former can circumvent the need to engage in social dumping.

Keywords: Multinationals; Social Dumping; Labour Standards (search for similar items in EconPapers)
Date: 2001
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
http://www.tandfonline.com/doi/abs/10.1080/09638190050086168 (text/html)
Access to full text is restricted to subscribers.

Related works:
Working Paper: Temporary Social Dumping, Union Legalisation and FDI: a Note on the Strategic Use of Standards (2000)
Working Paper: Temporary Social Dumping, Union Legalisation and FDI: A Note on the Strategic Use of Standards
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:taf:jitecd:v:9:y:2001:i:3:p:243-259

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/RJTE20

DOI: 10.1080/09638190050086168

Access Statistics for this article

The Journal of International Trade & Economic Development is currently edited by Pasquale Sgro, David E.A. Giles and Charles van Marrewijk

More articles in The Journal of International Trade & Economic Development from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().