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Unionized labor markets and globalized capital markets

Author

Listed:
  • Aloi, Marta
  • Leite-Monteiro, Manuel
  • Lloyd-Braga, Teresa

Abstract

This paper studies the effects of international integration of capital markets in a world where countries differ in their labor market institutions: one country has a perfectly competitive labor market while the other is unionized. We show that workers should favor autarky in the unionized country, but oppose it in the non unionized country and vice versa for owners of capital. Aggregate gains from integration, however, are negative. We also show that, under capital mobility, an increase in relative bargaining power of unions does not always improve workers' welfare.

Suggested Citation

  • Aloi, Marta & Leite-Monteiro, Manuel & Lloyd-Braga, Teresa, 2009. "Unionized labor markets and globalized capital markets," Journal of International Economics, Elsevier, vol. 78(1), pages 149-153, June.
  • Handle: RePEc:eee:inecon:v:78:y:2009:i:1:p:149-153
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    References listed on IDEAS

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    6. Dani Rodrik, 1997. "Has Globalization Gone Too Far?," Peterson Institute Press: All Books, Peterson Institute for International Economics, number 57.
    7. Wilson, John Douglas & Wildasin, David E., 2004. "Capital tax competition: bane or boon," Journal of Public Economics, Elsevier, vol. 88(6), pages 1065-1091, June.
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    Cited by:

    1. Pica Giovanni, 2010. "Capital Markets Integration and Labor Market Institutions," The B.E. Journal of Macroeconomics, De Gruyter, vol. 10(1), pages 1-57, March.
    2. Donado, Alejandro & Wälde, Klaus, 2010. "How bad is globalization for labour standards in the north?," W.E.P. - Würzburg Economic Papers 84, University of Würzburg, Chair for Monetary Policy and International Economics.
    3. Rüdiger Pethig & Frieder Kolleß, 2009. "Asymmetric capital-tax competition, unemployment and losses from capital market integration," MAGKS Papers on Economics 200940, Philipps-Universität Marburg, Faculty of Business Administration and Economics, Department of Economics (Volkswirtschaftliche Abteilung).
    4. repec:ilo:ilowps:469448 is not listed on IDEAS
    5. Thomas Aronsson & Erkki Koskela, 2009. "Optimal Income Taxation, Outsourcing and Policy Cooperation in a Dynamic Economy," CESifo Working Paper Series 2776, CESifo Group Munich.
    6. Domenico Buccella, 2011. "Labor unions and economic integration: A review," Económica, Departamento de Economía, Facultad de Ciencias Económicas, Universidad Nacional de La Plata, vol. 0, pages 25-89, January-D.
    7. Sara Amoroso & Mafini Dosso & Pietro Moncada-Paterno-Castello, 2015. "The impact of skill endowments and collective bargaining on knowledge-intensive greenfield FDI," JRC Working Papers on Corporate R&D and Innovation 2015-08, Joint Research Centre (Seville site).
    8. Palokangas, Tapio K., 2017. "Labor Market Regulation, International Trade and Footloose Capital," IZA Discussion Papers 10468, Institute for the Study of Labor (IZA).
    9. Donado, Alejandro. & Wälde, Klaus., 2012. "Globalization, trade unions and labour standards in the North," ILO Working Papers 994694483402676, International Labour Organization.
    10. Hamid Beladi & Chi-Chur Chao & Daniel Hollas, 2013. "Does globalization weaken labor unions in developing countries?," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 22(4), pages 562-571, June.

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