Temporary Social Dumping, Union Legalisation and FDI: A Note on the Strategic Use of Standards
AbstractThis paper analyses the welfare implications for a developing country of using union legalisation as a policy instrument to attract inward foreign direct investment. While its presence may discourage a foreign multinational (MNE) from locating in the host country, unionisation is an important rent-extracting instrument for the host country. We show that if the MNE benefits from dynamic effects, the host country government may have an incentive to adopt temporary social dumping: banning the union in the short run to extract higher rents in the future. However, if the government can use a fiscal instrument in conjunction with union legalisation, the former can circumvent the need to engage in social dumping.
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Bibliographic InfoPaper provided by Economic Policy Research Unit (EPRU), University of Copenhagen. Department of Economics in its series EPRU Working Paper Series with number 99-08.
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Other versions of this item:
- 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.
- Leahy, D., 2000. "Temporary Social Dumping, Union Legalisation and FDI: a Note on the Strategic Use of Standards," Papers 00/2, College Dublin, Department of Political Economy-.
- F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
- F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
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- Gerda Dewit & Holger Görg & Catia Montagna, 2009. "Should I stay or should I go? Foreign direct investment, employment protection and domestic anchorage," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 145(1), pages 93-110, April.
- Dermot Leahy & Catia Montagna, 2005. "Union Bargaining Power, Social Dumping, and Foreign Direct Investment," International Trade 0510001, EconWPA.
- Dewit, Gerda & Görg, Holger & Montagna, Catia, 2003.
"Should I Stay or Should I Go? A Note on Employment Protection, Domestic Anchorage, and FDI,"
IZA Discussion Papers
845, Institute for the Study of Labor (IZA).
- Gerda Dewit & Holger Gorg & Catia Montagna, 2003. "Should I Stay or Should I Go? A Note on Employment Protection, Domestic Anchorage and FDI," Dundee Discussion Papers in Economics 145, Economic Studies, University of Dundee.
- Dewit, G. & Holger, G. & Montagna, C., 2003. "Should I stay or should I go? A note on employment protection, domestic anchorage, and FDI," Economics, Finance and Accounting Department Working Paper Series n1291003, Department of Economics, Finance and Accounting, National University of Ireland - Maynooth.
- Dermot Leahy & Catia Montagna, 2005. "Union legislation and export platform FDI," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 14(4), pages 437-452.
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