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Business Diversification and the Strategic Design of Union Wage Contracts

Author

Listed:
  • Bughin, Jacques

    (Université Libre de Bruxelles)

  • Vannini, Stefano

    (UNIVERSITE 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.

Suggested Citation

  • Bughin, Jacques & Vannini, Stefano, 1994. "Business Diversification and the Strategic Design of Union Wage Contracts," LIDAM Discussion Papers IRES 1995013, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES), revised 02 Mar 1995.
    • Handle: RePEc:ctl:louvir:1995013
    as

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    More about this item

    Keywords

    multi-market contact; cost raising strategies; multinational enterprises; union-firm bargaining; unemployment;
    All these keywords.

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects
    • L20 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - General

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