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Union legislation and export platform FDI

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  • Dermot Leahy
  • Catia Montagna

Abstract

This paper examines Foreign Direct Investment in the presence of labour unions. An oligopoly model is developed in which identical firms locate in a host country in order to export to a foreign country. These firms are unionized and compete with foreign firms on the foreign market. We consider the incentives for social dumping via restrictive labour legislation, which we assume can be used by the host country government to affect the bargaining power of unions. We ask whether it is in the interest of the importing foreign country for the host country to relax or to tighten labour laws.

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File URL: http://www.tandfonline.com/doi/abs/10.1080/09638190500372560
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Bibliographic Info

Article provided by Taylor & Francis Journals in its journal The Journal of International Trade & Economic Development.

Volume (Year): 14 (2005)
Issue (Month): 4 ()
Pages: 437-452

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Handle: RePEc:taf:jitecd:v:14:y:2005:i:4:p:437-452

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Related research

Keywords: Foreign Direct Investment; labour unions; labour legislation; social dumping; exports;

References

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  1. Robin Naylor & Michele Santoni, 2003. "Foreign direct investment and wage bargaining," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 12(1), pages 1-18.
  2. Kyle Bagwell & Robert W. Staiger, 1999. "Domestic Policies, National Sovereignty and International Economic Institutions," NBER Working Papers 7293, National Bureau of Economic Research, Inc.
  3. Dermot Leahy & Catia Montagna, 2001. "Temporary social dumping, union legalisation and FDI: a note on the strategic use of standards," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 9(3), pages 243-259.
  4. Dermot Leahy & Catia Montagna, 1999. "Unionisation and Foreign Direct Investment: Challenging Conventional Wisdom?," Dundee Discussion Papers in Economics 097, Economic Studies, University of Dundee.
  5. Casella, Alessandra, 1995. "Free Trade and Evolving Standards," CEPR Discussion Papers 1204, C.E.P.R. Discussion Papers.
  6. Barry, F & Bradley, J, 1997. ""FDI and Trade : The Irish Host-Country Experience"," Papers 97/13, College Dublin, Department of Political Economy-.
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