Unionized Oligopoly, Trade Liberalization and Location Choice

Kjell Lommerud (), Frode Meland and Lars Sørgard

No 777, CESifo Working Paper Series from CESifo

Abstract: In a two-country reciprocal dumping model, with one country unionized, we analyze how wage setting and firm location are influenced by trade liberalization. We show that trade liberalization can induce FDI, which is at odds with conventional theoretical wisdom and cannot happen in a corresponding model without unionization. FDI is undertaken partly to win a distributional battle with unionized labor, and the incentives to invest abroad can be too large seen from a welfare point of view.

Keywords: unionized oligopoly; economic integration; foreign direct investment (search for similar items in EconPapers)
JEL-codes: D43 F15 F21 J51 (search for similar items in EconPapers)
Date: 2002
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Citations: View citations in EconPapers (5)

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Related works:
Journal Article: Unionised Oligopoly, Trade Liberalisation and Location Choice (2003)
Working Paper: Unionized Oligopoly, Trade Liberalization and Location Choice (2001)
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_777

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