Leahy, Dermot

Montagna, Catia

English

This paper investigates the effects of different degrees of wage setting centralisation on (1) the incentive of a MNE to locate in a host country, (2) the optimal level of investment it decides to commit to its foreign operation, and (3) the host country’s welfare. Decentralised and centralised wage bargaining are considered. The nature of product market competition between the MNE and domestic firms affects results which cast doubt on some of the conventional wisdom on FDI. In particular, we show that: (i) it is not always welfare improving to attract inward FDI, and (ii) the MNE may prefer centralised to decentralised wage setting regimes

University of Dundee Online Publications

Dundee Discussion Papers in Economics 097:Unionisation and foreign direct investment: challenging conventional wisdom?

Bargaining with Commitment,

Characterising Relative Performance: The Productivity Advantage of Foreign Owned Firms in the U.K.”,

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Cross-hauling Direct Foreign Investment and Unionised Oligopoly”,

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Foreign Direct Investment under Oligopoly: Profit Shifting or Profit Capturing?”,

Foreign Direct Investment with Unemployment and Endogenous Taxes and Tariffs”,

Import Competition, International Factor Mobility and Lobbying Responses: The Shumpeterian Industry Case”,

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International Trade and Economic Integration when Labour Markets are Generally Unionised”,

Investment Incentives as Tariff Substitutes: A Comprehensive Measure of Protection”,

Multinational Enterprise and Economic Analysis,

Strategic Direct Investment under Unionised Oligopoly”,

The Eclectic Paradigm of International Production: A Restatement of some Possible Extentions”,

The growth of foreign direct investment in Europe’,

Trade Unions in an Open Economy: A General Equilibrium Analysis”,

Union-Oligopoly Sequential Bargaining: Trade and Industrial Policies”,

Unionised Oligopoly and International Trade Policy”,

Wage Bargaining and Foreign Direct Investment”, mimeo,

World Investment Report: Transnational Corporation, Market Structure and Competition Policy,

https://discovery.dundee.ac.uk/ws/files/106128/DDPE_097.pdf

Dundee Discussion Papers in Economics 097:Unionisation and foreign direct investment: challenging conventional wisdom?

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University of Dundee Online Publications

University of Dundee Online Publications