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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.

Suggested Citation

  • Domenico Buccella, 2011. "Unions’ Bargaining Coordination in Multinational Enterprises," FIW Working Paper series 061, FIW.
    • Handle: RePEc:wsr:wpaper:y:2011:i:061
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    References listed on IDEAS

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    1. Carsten Eckel & Hartmut Egger, 2017. "The Dilemma of Labor Unions: Local Objectives vs Global Bargaining," Review of International Economics, Wiley Blackwell, vol. 25(3), pages 534-566, August.
    2. Banerji, A., 2002. "Sequencing strategically: wage negotiations under oligopoly," International Journal of Industrial Organization, Elsevier, vol. 20(7), pages 1037-1058, September.
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    4. Emmanuel Petrakis & Minas Vlassis, 2004. "Endogenous wage bargaining institutions in oligopolistic sectors," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 24(1), pages 55-73, July.
    5. Zhao, Laixun, 1995. "Cross-hauling direct foreign investment and unionized oligopoly," European Economic Review, Elsevier, vol. 39(6), pages 1237-1253, June.
    6. Domenico Buccella, 2013. "Unions' bargaining coordination in multi-unit firms," Economics Bulletin, AccessEcon, vol. 33(1), pages 217-225.
    7. 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.
    8. 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.
    9. 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.
    10. 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.
    11. BORGHIJS, Alain & DU CAJU, Philip, 1999. "EMU and European trade union cooperation," Working Papers 1999013, University of Antwerp, Faculty of Business and Economics.
    12. 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 305-319, September.
    13. De Fraja, Giovanni, 1993. "Staggered vs. synchronised wage setting in oligopoly," European Economic Review, Elsevier, vol. 37(8), pages 1507-1522, December.
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    Cited by:

    1. Carsten Eckel & Hartmut Egger, 2017. "The Dilemma of Labor Unions: Local Objectives vs Global Bargaining," Review of International Economics, Wiley Blackwell, vol. 25(3), pages 534-566, August.
    2. Luciano Fanti & Domenico Buccella, 2018. "Social Welfare and Profit-Sharing Rule in a Unionised Duopoly with Profit Tax/Subsidy," Hacienda Pública Española / Review of Public Economics, IEF, vol. 226(3), pages 59-84, September.

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    More about this item

    Keywords

    bargaining; Multinational Enterprises; labor unions;
    All these keywords.

    JEL classification:

    • C78 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Bargaining Theory; Matching Theory
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects
    • D60 - Microeconomics - - Welfare Economics - - - General

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