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Unions’ Bargaining Coordination in Multinational Enterprises

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  • Domenico Buccella

Abstract

This paper investigates the coordination of bargaining activities among labor unions in a Multinational Enterprise (MNE) with plants in different countries. Making use of a threestage game where the parties sequentially decide whether o coordinate negotiations, it derives the bargaining regimes arising as sub-game perfect equilibria. In presence of workers perfect substitutes in production and symmetry in the plants’ efficiency, it is shown that unions’ transaction costs may attenuate the conflict of interests among the parties as regards the level of coordination at which negotiations should take place.

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Bibliographic Info

Paper provided by FIW in its series FIW Working Paper series with number 061.

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Length: 17
Date of creation: Jun 2011
Date of revision:
Handle: RePEc:wsr:wpaper:y:2011:i:061

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Keywords: bargaining; Multinational Enterprises; labor unions;

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  1. Michele Santoni, 2009. "Does product market integration lead to decentralised wage bargaining institutions?," UNIMI - Research Papers in Economics, Business, and Statistics unimi-1091, Universitá degli Studi di Milano.
  2. Emmanuel Petrakis & Minas Vlassis, 2004. "Endogenous wage bargaining institutions in oligopolistic sectors," Economic Theory, Springer, vol. 24(1), pages 55-73, 07.
  3. Henrick Horn & Asher Wolinsky, 1988. "Bilateral Monopolies and Incentives for Merger," RAND Journal of Economics, The RAND Corporation, vol. 19(3), pages 408-419, Autumn.
  4. De Fraja, Giovanni, 1993. "Staggered vs. synchronised wage setting in oligopoly," European Economic Review, Elsevier, vol. 37(8), pages 1507-1522, December.
  5. Dobson, Paul W., 1994. "Multifirm unions and the incentive to adopt pattern bargaining in oligopoly," European Economic Review, Elsevier, vol. 38(1), pages 87-100, January.
  6. Borghijs A. & Du Caju Ph., 1999. "EMU and European Trade Union Cooperation," Working Papers 1999013, University of Antwerp, Faculty of Applied Economics.
  7. Arijit Mukherjee, 2010. "Product Market Cooperation, Profits and Welfare in the Presence of Labor Union," Journal of Industry, Competition and Trade, Springer, vol. 10(2), pages 151-160, June.
  8. Davidson, Carl, 1988. "Multiunit Bargaining in Oligopolistic Industries," Journal of Labor Economics, University of Chicago Press, vol. 6(3), pages 397-422, July.
  9. Banerji, A., 2002. "Sequencing strategically: wage negotiations under oligopoly," International Journal of Industrial Organization, Elsevier, vol. 20(7), pages 1037-1058, September.
  10. Domenico Buccella, 2013. "Unions' bargaining coordination in multi-unit firms," Economics Bulletin, AccessEcon, vol. 33(1), pages 217-225.
  11. Barcena-Ruiz, Juan Carlos & Begona Garzon, Maria, 2002. "The Organisation of Wage Bargaining in Divisionalised Firms," Australian Economic Papers, Wiley Blackwell, vol. 41(3), pages 305-19, September.
  12. Zhao, Laixun, 1995. "Cross-hauling direct foreign investment and unionized oligopoly," European Economic Review, Elsevier, vol. 39(6), pages 1237-1253, June.
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