EconPapers    
Economics at your fingertips  
 

Foreign direct investment and wage bargaining

Robin Naylor () and Michele Santoni ()

CSGR Working papers series from Centre for the Study of Globalisation and Regionalisation (CSGR), University of Warwick

Abstract: We derive the sub-game perfect Nash equilibria for the foreign direct investment (FDI) game played between two unionised firms. Among other results, we show that FDI is less likely, ceteris paribus, the greater is union bargaining power, the stronger the weight the union attaches to wages, and the more substitutable are firms’ products in the potential host country. We derive results concerning the conditions under which FDI will be reciprocal. We also examine conditions under which the FDI game between firms will possess the characteristics of a Prisoners’ Dilemma. Finally, we consider the possibility that firms might delegate wage determination to unions as a method of strategic deterrence against entry by FDI.

Keywords: Foreign direct investment; oligopoly; wage bargaining. (search for similar items in EconPapers)
Date: 1999-10
References: Add references at CitEc
Citations: View citations in EconPapers (5) Track citations by RSS feed

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
Journal Article: Foreign direct investment and wage bargaining (2003) Downloads
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:wck:wckewp:41/99

Access Statistics for this paper

More papers in CSGR Working papers series from Centre for the Study of Globalisation and Regionalisation (CSGR), University of Warwick Centre for the Study of Globalisation and Regionalisation (CSGR) University of Warwick Coventry CV4 7AL, U.K.. Contact information at EDIRC.
Bibliographic data for series maintained by Thomas Krichel ().

 
Page updated 2020-07-31
Handle: RePEc:wck:wckewp:41/99