On Footloose Industries, Asymmetric Information and Wage Bargaining

Ravi Kanbur and Nancy Chau

No 4095, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: If capital becomes internationally mobile but labor does not, is the bargaining outcome for workers worsened? In this paper we show that the answer to this question depends critically on the information structure of the bargaining process. In particular, we demonstrate a hitherto underappreciated informational role of capital mobility in determining the distribution of output between workers and employers. In doing so we bring together three strands of literature not often seen together--incentive compatible contracting, union-employer bargaining, and the consequences of capital mobility.

Keywords: Foreign direct investment; Bargaining under asymmetric information; Union wage; Employment (search for similar items in EconPapers)
JEL-codes: D8 F2 J5 (search for similar items in EconPapers)
Date: 2003-10
New Economics Papers: this item is included in nep-mic
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Citations: View citations in EconPapers (6)

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Related works:
Working Paper: ON FOOTLOOSE INDUSTRIES, ASYMMETRIC INFORMATION,AND WAGE BARGAINING (2003)
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