Union Bargaining Power, Social Dumping, and Foreign Direct Investment
AbstractThis 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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Bibliographic InfoPaper provided by EconWPA in its series International Trade with number 0510001.
Length: 16 pages
Date of creation: 05 Oct 2005
Date of revision:
Note: Type of Document - pdf; pages: 16
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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
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