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Union-Firm Bargaining Scope and Structure under Strategic Foreign Direct Investment

Author

Listed:
  • Bughin, Jacques

    (Université Libre de Bruxelles; McKinsey & Co.)

  • Vannini, Stefano

    (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES))

Abstract

This paper analyses the relationship between union power and the presence of multinational enterprises. The focus is on how union-firm bargaining structure and bargaining scope affect-and are affected by-strategic foreign direct investment (FDI). Concerning the bargaining scope (for a given bargaining structure) we firstly determine which one-i.e. right-to-manage (RTM) or efficient bargaining (EB)- is more favorable to FDI. Secondly, cases are identified in wich host-country firm(s) and union(s) agree on a bargaining agenda. Concerning the bargaining structure, we determine which one (i.e. partial unionization or full unionization -either centralized or decentralized-) maximizes the probability of MNE entry. Implications on host-country unemployment are also drawn.

Suggested Citation

  • Bughin, Jacques & Vannini, Stefano, 1994. "Union-Firm Bargaining Scope and Structure under Strategic Foreign Direct Investment," LIDAM Discussion Papers IRES 1994026, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    • Handle: RePEc:ctl:louvir:1994026
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    Cited by:

    1. Vannini, Stefano & Bughin, Jacques, 2000. "To be (unionized) or not to be? A case for cost-raising strategies under Cournot oligopoly," European Economic Review, Elsevier, vol. 44(9), pages 1763-1781, October.

    More about this item

    Keywords

    foreign direct investment; multinational enterprises; efficient bargaining; right-to-manage;
    All these keywords.

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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