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International Production and Welfare Distribution Under Different Union Wage Settings

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Author Info
Domenico Buccella

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Abstract

A key aspect of economic integration is the internationalization of productive activities, conducted mainly by Multinational Enterprises, which often occurs in countries with unionized labor markets that belong to an already integrated area like the EU. Solving a two-stage game by backward induction both in a static and in a repeated framework, this paper investigates, within a symmetric two-country model of oligopoly with a homogeneous product, the effects on welfare distribution of different union wage settings, examining both separate and coordinated wage settings by national labor unions. Some policy indications are derived.

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Paper provided by FIW in its series FIW Working Paper series with number 025.

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Handle: RePEc:wsr:wpaper:y:2009:i:025

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Related research
Keywords: international production; union competition; union collusion; welfare distribution;

Find related papers by JEL classification:
F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
J50 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - General
J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects

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  1. Chiara Strozzi, 2007. "Product Market Integration and Union Collusion," Review of International Economics, Blackwell Publishing, vol. 15(1), pages 17-36, 02. [Downloadable!] (restricted)
  2. Huizinga, Harry, 1993. " International Market Integration and Union Wage Bargaining," Scandinavian Journal of Economics, Blackwell Publishing, vol. 95(2), pages 249-55.
  3. Bughin, Jacques & Vannini, Stefano, 1995. "Strategic direct investment under unionized oligopoly," International Journal of Industrial Organization, Elsevier, vol. 13(1), pages 127-145, March. [Downloadable!] (restricted)
  4. Naylor, Robin, 1999. "Union Wage Strategies and International Trade," Economic Journal, Royal Economic Society, vol. 109(452), pages 102-25, January. [Downloadable!] (restricted)
    Other versions:
  5. Straume, Odd Rune, 2002. "Union collusion and intra-industry trade," International Journal of Industrial Organization, Elsevier, vol. 20(5), pages 631-652, May. [Downloadable!] (restricted)
    Other versions:
  6. Oswald, Andrew J, 1985. " The Economic Theory of Trade Unions: An Introductory Survey," Scandinavian Journal of Economics, Blackwell Publishing, vol. 87(2), pages 160-93.
  7. 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)
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  8. Danthine, Jean-Pierre & Hunt, Jennifer, 1994. "Wage Bargaining Structure, Employment and Economic Integration," Economic Journal, Royal Economic Society, vol. 104(424), pages 528-41, May. [Downloadable!] (restricted)
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  9. Mezzetti, Claudio & Dinopoulos, Elias, 1991. "Domestic unionization and import competition," Journal of International Economics, Elsevier, vol. 31(1-2), pages 79-100, August. [Downloadable!] (restricted)
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  10. Munch, Jakob Roland & Skaksen, Jan Rose, 2002. " Product Market Integration and Wages in Unionized Countries," Scandinavian Journal of Economics, Blackwell Publishing, vol. 104(2), pages 289-99, June. [Downloadable!] (restricted)
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  11. Borghijs A. & Du Caju Ph., 1999. "EMU and European Trade Union Cooperation," Working Papers 1999013, University of Antwerp, Faculty of Applied Economics.
  12. Driffill, John & van der Ploeg, Frederick, 1995. " Trade Liberalization with Imperfect Competition in Goods and Labour Markets," Scandinavian Journal of Economics, Blackwell Publishing, vol. 97(2), pages 223-43, June.
  13. Zhao, Laixun, 1995. "Cross-hauling direct foreign investment and unionized oligopoly," European Economic Review, Elsevier, vol. 39(6), pages 1237-1253, June. [Downloadable!] (restricted)
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This page was last updated on 2009-11-17.

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