Employment protection and globalisation in dynamic oligopoly
AbstractWe construct a model in which oligopolistic firms decide where to locate. Firms choose to locate either in a country where employment protection implies costly output adjustments or in one without adjustment costs. Using a two-period three-stage game with uncertainty it is demonstrated that location is influenced by both flexibility and strategic concerns. We show that the strategic effects under Cournot work towards domestic anchorage in the country with adjustment costs while those under Bertrand do not.Strategic agglomeration can occur in the inflexible country under Cournot and even under Bertrand provided uncertainty and foreign direct investment costs are low.
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Bibliographic InfoPaper provided by Royal Economic Society in its series Royal Economic Society Annual Conference 2003 with number 57.
Date of creation: 04 Jun 2003
Date of revision:
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uncertainty; flexibility; oligopoly; employment protection; foreign direct investment;
Other versions of this item:
- Gerda Dewit & Dermot Leahy & Catia Montagna, 2003. "Employment protection and globalisation in dynamic oligopoly," Economics, Finance and Accounting Department Working Paper Series n1200103, Department of Economics, Finance and Accounting, National University of Ireland - Maynooth.
- Gerda Dewit & Dermot Leahy & Catia Montagna, 2003. "Employment Protection and Globalisation in Dynamic Oligopoly," Dundee Discussion Papers in Economics 137, Economic Studies, University of Dundee.
- Dewit, Gerda & Leahy, Dermot & Montagna, Catia, 2003. "Employment Protection and Globalization in Dynamic Oligopoly," CEPR Discussion Papers 3871, C.E.P.R. Discussion Papers.
- D80 - Microeconomics - - Information, Knowledge, and Uncertainty - - - General
- F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
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