The Location of Firms in Unionized Countries
AbstractThis paper develops a two-country model of international trade with Cournot competition. The labor markets are unionized so that a trade union bargains efficiently with each firm over wage and employment. It is shown that if the bargaining power of unions differs among countries then, as trade costs are reduced, the country with relatively weak unions gradually acquires all firms. However, for a range of trade costs it is also a locally stable equilibrium for all firms to locate in the country with strong unions.
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Bibliographic InfoPaper provided by School of Economics and Management, University of Aarhus in its series Economics Working Papers with number 1999-12.
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Integration; agglomeration; trade unions;
Other versions of this item:
- F15 - International Economics - - Trade - - - Economic Integration
- J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects
- R11 - Urban, Rural, Regional, Real Estate, and Transportation Economics - - General Regional Economics - - - Regional Economic Activity: Growth, Development, Environmental Issues, and Changes
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