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

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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. 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.
    2. 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, vol. 73(2), pages 355-376, November.
    3. Erling Barth & Oddbjørn Raaum & Robin Naylor, 2000. "Union Wage Effects: Does Membership Matter?," Manchester School, University of Manchester, vol. 68(3), pages 259-275, June.
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    5. repec:bla:manchs:v:68:y:2000:i:3:p:259-75 is not listed on IDEAS
    6. 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.
    7. 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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    Cited by:

    1. Jirjahn, Uwe, 2024. "Corporate Globalization and Worker Representation," IZA Discussion Papers 16727, Institute of Labor Economics (IZA).
    2. Uwe Jirjahn, 2021. "Foreign ownership and intra-firm union density in Germany," Economic and Industrial Democracy, Department of Economic History, Uppsala University, Sweden, vol. 42(4), pages 1052-1079, November.
    3. Joseph A. Clougherty & Klaus Gugler & Lars Sørgard, 2012. "Cross-Border Mergers and Domestic Wages: Integrating Positive 'Spillover' Effects and Negative 'Bargaining' Effects," Department of Economics Working Papers wuwp136, Vienna University of Economics and Business, Department of Economics.
    4. Balsvik, Ragnhild & Sæthre, Morten, 2014. "Rent Sharing with Footloose Production. Foreign Ownership and Wages Revisited," Discussion Paper Series in Economics 30/2014, Norwegian School of Economics, Department of Economics.
    5. O'Farrell, Rory, 2012. "The effect of international firm mobility on wages and unemployment," Labour Economics, Elsevier, vol. 19(6), pages 931-943.

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    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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