Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/19009
Authors: 
Lommerud, Kjell Erik
Meland, Frode
Straume, Odd Rune
Year of Publication: 
2005
Series/Report no.: 
CESifo working papers 1545
Abstract: 
We analyze unionized firms? incentives to outsource intermediate goods production to foreign (low-cost) subcontractors. Such outsourcing leads to increased wages for the remaining inhouse production. We find that stronger unions, which imply higher domestic wages, reduce incentives for international outsourcing. Though somewhat surprising, this result provides a theoretical reconciliation of the empirically observed trends of deunionization and increased international outsourcing in many countries. We further show that globalization - interpreted as either market integration or increased product market competition - will increase incentives for international outsourcing.
Subjects: 
international outsourcing
deunionization
globalization
JEL: 
L24
J51
F16
Document Type: 
Working Paper

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