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Globalisation and union opposition to technological change

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Author Info

  • Lommerud, Kjell Erik

    () (University of Bergen, Department of Economics)

  • Meland, Frode

    () (University of Bergen, Department of Economics)

  • Straume, Odd Rune

    () (University of Minho, Department of Economics)

Abstract

We find that trade unions have a rational incentive to oppose the adoption of labour-saving technology when labour demand is inelastic and unions care much for employment relative to wages. Trade liberalisation typically increases trade union technology opposition. These conclusions are reached in a model of international duopoly with monopoly wage setting in one of the countries, and two-way trade. An important stepping stone for the result is to note that even though trade liberalisation means a tougher competitive environment for firms, labour demand tends to increase. We also find that the incentive for technology opposition is stronger in the more technologically advanced country and in the country with the larger home market, complementing earlier explanations for technological catch-up and leapfrogging.

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Bibliographic Info

Paper provided by University of Bergen, Department of Economics in its series Working Papers in Economics with number 01/05.

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Length: 28 pages
Date of creation: 04 Jan 2005
Date of revision:
Handle: RePEc:hhs:bergec:2005_001

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Postal: Institutt for økonomi, Universitetet i Bergen, Postboks 7802, 5020 Bergen, Norway
Phone: (+47)55589200
Fax: (+47)55589210
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Web page: http://www.uib.no/econ/en
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Keywords: Trade liberalisation; technology adoption; international unionised oligopoly.;

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References

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