Unionized Oligopoly, Trade Liberalization and Location Choice

Arbeitspapier

In a two-country reciprocal dumping model, with one country unionized, we analyze how wage setting and firm location are influenced by trade liberalization. We show that trade liberalization can induce FDI, which is at odds with conventional theoretical wisdom and cannot happen in a corresponding model without unionization. FDI is undertaken partly to win a distributional battle with unionized labor, and the incentives to invest abroad can be too large seen from a welfare point of view.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: CESifo Working Paper ; No. 777

Classification and Topics

• Classification: Wirtschaft ; Market Structure, Pricing, and Design: Oligopoly and Other Forms of Market Imperfection ; Economic Integration ; International Investment; Long-term Capital Movements ; Trade Unions: Objectives, Structure, and Effects
• Subject: unionized oligopoly ; economic integration ; foreign direct investment

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Lommerud, Kjell Erik ; Meland, Frode ; Sørgard, Lars
• Event: Veröffentlichung
• (who): Center for Economic Studies and ifo Institute (CESifo)
• (where): Munich
• (when): 2002

Further information

• Handle: http://hdl.handle.net/10419/75999
• Last update: 10.03.2025, 11:43 AM CET