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Should trade unions welcome foreign investors? First evidence from Danish matched employer-employee data

  • Sebastian Braun


    (Humboldt University of Berlin)

While foreign direct investment (FDI) is widely believed to have an adverse effect on the bargaining power of unions and hence on union wages, little empirical research has been done to substantiate this conjecture. The present paper aims at filling this gap by analysing the effect of foreign ownership on the union wage premium in Denmark. Using matched employer-employee data, the positive effect of plant level unionisation on wages is found to vanish in foreign-owned firm.

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Article provided by AccessEcon in its journal Economics Bulletin.

Volume (Year): 29 (2009)
Issue (Month): 2 ()
Pages: 1175-1181

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Handle: RePEc:ebl:ecbull:eb-09-00150
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  1. Mezzetti, C. & Dinopoulos, E., 1989. "Domestic Unionization And Import Competition," Papers 337, California Davis - Institute of Governmental Affairs.
  2. Heyman, Fredrik & Sjöholm, Fredrik & Gustavsson Tingvall, Patrik, 2004. "Is There Really A Foreign Ownership Wage Premium?Evidence From Matched Employer-Employee Data," EIJS Working Paper Series 206, The European Institute of Japanese Studies.
  3. Andrews, Martyn J. & Stewart, Mark B. & Swaffield, Joanna K. & Upward, Richard, 1998. "The estimation of union wage differentials and the impact of methodological choices," Labour Economics, Elsevier, vol. 5(4), pages 449-474, December.
  4. Barth, E. & Raaum, O. & Naylor, R., 1998. "Union Wage Effects: Does Membership Matter?," The Warwick Economics Research Paper Series (TWERPS) 500, University of Warwick, Department of Economics.
  5. Minsik Choi, 2001. "Threat Effect of Foreign Direct Investment on Labor Union Wage Premium," Working Papers wp27, Political Economy Research Institute, University of Massachusetts at Amherst.
  6. Moulton, Brent R, 1990. "An Illustration of a Pitfall in Estimating the Effects of Aggregate Variables on Micro Unit," The Review of Economics and Statistics, MIT Press, vol. 72(2), pages 334-38, May.
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