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| Author: | L Zhao |
| Title: | The impact of foreign direct investment on wages and employment |
| Journal: | Oxford Economic Papers
1998 : APR, VOL. 50:2, p. 284-301 |
| Index terms: | FOREIGN INVESTMENT EMPLOYMENT PAY LABOUR MODELS |
| Language: | eng |
| Abstract: | The paper studies the impact of foreign direct investment (FDI) on wages and employment. When labor-management bargaining is industry-wide, two effects of FDI are identified: the collusion effect and the threat-point effect. It is shown that: (i) FDI always reduces the negotiated wage: (ii) FDI reduces union employment and the competitive wage if the union cares more about employment than wages or is equally concerned about employment and wages. However, if labor-management bargaining is firm-specific and unionization is industry-wide, then the above effects of FDI are substantially reduced. |
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