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

Author

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  • Sebastian Braun

    () (Humboldt University of Berlin)

Abstract

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.

Suggested Citation

  • Sebastian Braun, 2009. "Should trade unions welcome foreign investors? First evidence from Danish matched employer-employee data," Economics Bulletin, AccessEcon, vol. 29(2), pages 1175-1181.
  • Handle: RePEc:ebl:ecbull:eb-09-00150
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    File URL: http://www.accessecon.com/Pubs/EB/2009/Volume29/EB-09-V29-I2-P64.pdf
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    References listed on IDEAS

    as
    1. Barth, E. & Naylor, R. & Raaum, O., 1995. "Union Wage Effects; Does Membership Matter?," Memorandum 09/1995, Oslo University, Department of Economics.
    2. Mezzetti, Claudio & Dinopoulos, Elias, 1991. "Domestic unionization and import competition," Journal of International Economics, Elsevier, pages 79-100.
    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. 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.
    5. Heyman, Fredrik & Sjoholm, Fredrik & Tingvall, Patrik Gustavsson, 2007. "Is there really a foreign ownership wage premium? Evidence from matched employer-employee data," Journal of International Economics, Elsevier, pages 355-376.
    6. Heyman, Fredrik & Sjoholm, Fredrik & Tingvall, Patrik Gustavsson, 2007. "Is there really a foreign ownership wage premium? Evidence from matched employer-employee data," Journal of International Economics, Elsevier, pages 355-376.
    7. Barth, Erling & Raaum, Oddbjorn & Naylor, Robin, 2000. "Union Wage Effects: Does Membership Matter?," Manchester School, University of Manchester, vol. 68(3), pages 259-275, June.
    8. 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.
    9. 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 334-338, May.
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    Citations

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    Cited by:

    1. Clougherty, Joseph A. & Gugler, Klaus & Sørgard, Lars, 2012. "Cross-Border Mergers and Domestic Wages: Integrating Positive 'Spillover' Effects and Negative 'Bargaining' Effects," Department of Economics Working Paper Series 3512, WU Vienna University of Economics and Business.
    2. Jirjahn, Uwe, 2017. "Foreign Ownership and Intra-Firm Union Density in Germany," IZA Discussion Papers 11154, Institute for the Study of Labor (IZA).
    3. Balsvik, Ragnhild & Sæthre, Morten, 2014. "Rent Sharing with Footloose Production. Foreign Ownership and Wages Revisited," Discussion Paper Series in Economics 30/2014, Department of Economics, Norwegian School of Economics.
    4. Jirjahn, Uwe, 2017. "Foreign Ownership and Intra-Firm Union Density in Germany," GLO Discussion Paper Series 149, Global Labor Organization (GLO).
    5. O'Farrell, Rory, 2012. "The effect of international firm mobility on wages and unemployment," Labour Economics, Elsevier, vol. 19(6), pages 931-943.

    More about this item

    Keywords

    Collective bargaining foreign direct investment trade unions wages;

    JEL classification:

    • F1 - International Economics - - Trade
    • F2 - International Economics - - International Factor Movements and International Business

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