Business Diversification and the Strategic Design of Union Wage Contracts

Jacques Bughin and Stefano Vannini
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Stefano Vannini: UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES)

No 1995013, LIDAM Discussion Papers IRES from Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES)

Abstract: This paper analyses how a diversifying firm can strategically design its wage policy in order to gain market power in unionized markets. This paper shows that union power in the local market power in the local market coupled with the nature of the wage contractual agreement process-i.e. the type of bargaining scope and structure- are key determinants as whether the diversifying firm chooses to be unionized and strategically adopts cost raising strategies.

Keywords: multi-market contact; cost raising strategies; multinational enterprises; union-firm bargaining; unemployment (search for similar items in EconPapers)
JEL-codes: F23 J23 J51 L20 (search for similar items in EconPapers)
Pages: 14
Date: 1994-08-01, Revised 1995-03-02
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Persistent link: https://EconPapers.repec.org/RePEc:ctl:louvir:1995013

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