Unionised Oligopoly, Trade Liberalisation and Location Choice

  title={Unionised Oligopoly, Trade Liberalisation and Location Choice},
  author={Kjell Erik Lommerud and Frode Meland and Lars S{\o}rgard},
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. 


Publications referenced by this paper.

International trade and economic integration when labour markets are generally unionized

  • R. Naylor
  • European Economic Review
  • 1998
Highly Influential
4 Excerpts

Trade, FDI and unions”, Paper presented at a CEPR Workshop on FDI and the Multinational

  • D. Collie, H. Vandenbussche
  • 1998
2 Excerpts

Wage bargaining and foreign direct investment

  • R. Naylor, M. Santoni
  • Mimeo, University of Warwick
  • 1998
1 Excerpt

Similar Papers

Loading similar papers…