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Union Bargaining Power, Social Dumping, and Foreign Direct Investment

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Author Info
Dermot Leahy (University College Dublin)
Catia Montagna (University of Dundee)

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Abstract

This paper examines Foreign Direct Investment in the presence of labour unions. An oligopoly model is developed in which identical firms locate in a host country in order to export to a foreign country. These firms are unionised and compete with foreign firms on the foreign market. We consider the incentives for social dumping via restrictive labour legislation which we assume can be used by the host country government to affect the bargaining power of unions. We ask whether it is in the interest of the importing foreign country for the host country to relax or to tighten labour laws.

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File URL: http://129.3.20.41/eps/it/papers/0510/0510001.pdf
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Publisher Info
Paper provided by EconWPA in its series International Trade with number 0510001.

Download reference. The following formats are available: HTML (with abstract), plain text (with abstract), BibTeX, RIS (EndNote, RefMan, ProCite), ReDIF
Length: 16 pages
Date of creation: 05 Oct 2005
Date of revision:
Handle: RePEc:wpa:wuwpit:0510001

Note: Type of Document - pdf; pages: 16
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Web page: http://129.3.20.41

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Related research
Keywords: Foreign Direct Investment; Labour Unions; Labour Legislation; Social Dumping; Exports.;

Find related papers by JEL classification:
F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies
L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

This paper has been announced in the following NEP Reports:

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Barry, F & Bradley, J, 1997. ""FDI and Trade : The Irish Host-Country Experience"," Papers 97/13, College Dublin, Department of Political Economy-.
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  2. Sajal Lahiri & Yoshiyasu Ono, 2003. "Export-Oriented Foreign Direct Investment and Local Content Requirement," Pacific Economic Review, Blackwell Publishing, vol. 8(1), pages 1-14, 01. [Downloadable!] (restricted)
    Other versions:
  3. Zhao, Laixun, 1998. "The Impact of Foreign Direct Investment on Wages and Employment," Oxford Economic Papers, Oxford University Press, vol. 50(2), pages 284-301, April.
  4. Leahy, Dermot & Montagna, Catia, 2000. "Unionisation and Foreign Direct Investment: Challenging Conventional Wisdom?," Economic Journal, Royal Economic Society, vol. 110(462), pages C80-92, March. [Downloadable!] (restricted)
    Other versions:
  5. Robin Naylor & Michele Santoni, 2003. "Foreign direct investment and wage bargaining," Journal of International Trade & Economic Development, Taylor and Francis Journals, vol. 12(1), pages 1-18, March. [Downloadable!] (restricted)
    Other versions:
  6. Dermot Leahy & Catia Montagna, . "Temporary Social Dumping, Union Legalisation and FDI: A Note on the Strategic Use of Standards," EPRU Working Paper Series 99-08, Economic Policy Research Unit (EPRU), University of Copenhagen. Department of Economics.
    Other versions:
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This page was last updated on 2009-11-13.

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