Unionisation and foreign direct investment: Challenging conventional wisdom?

Citation
D. Leahy et C. Montagna, Unionisation and foreign direct investment: Challenging conventional wisdom?, ECON J, 110(462), 2000, pp. C80-C92
Citations number
15
Language
INGLESE
art.tipo
Article
Categorie Soggetti
Economics
Journal title
ECONOMIC JOURNAL
ISSN journal
0013-0133 → ACNP
Volume
110
Issue
462
Year of publication
2000
Pages
C80 - C92
Database
ISI
SICI code
0013-0133(200003)110:462<C80:UAFDIC>2.0.ZU;2-R
Abstract
This paper investigates the effects of different degrees of wage setting ce ntralisation on the incentive of a MNE to locate in a host country, and on the host country's welfare. Decentralised and centralised wage bargaining a re considered. The nature of product market competition between the MNE and domestic firms proves crucial to results which cast doubt on some of the c onventional wisdom on FDI. In particular, we show that: (i) it is not alway s welfare improving to attract inward FDI, and (ii) the MNE may prefer cent ralised to decentralised wage setting regimes.