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http://hdl.handle.net/10419/20038
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| Title: | | Foreign Direct Investment, Labour Market Regulation and Self-Interested Governments  |
| Authors: | | Palokangas, Tapio |
| Issue Date: | | 2003 |
| Series/Report no.: | | IZA Discussion paper series 793 |
| Abstract: | | This document examines foreign direct investment (FDI) when multinationals and labour unions bargain over labour contracts and lobby the self-interested government for taxation and labour market regulation. We demonstrate that right-to-manage bargaining predicts higher returns for FDI than does non-unionization or efficient bargaining. This advantage is further magnified in the presence of credible wage contracts. When the labour market is nonunionized, or there is a bargain over employment, the ruling elite reaps the surplus of FDI through taxation or regulation. In the absence of credible contracts, unions have incentives to claim a bigger share of the revenue of FDI. |
| Subjects: | | foreign direct investment labour market regulation lobbying |
| JEL: | | D78 J51 F23 F21 |
| Document Type: | | Working Paper |
| Appears in Collections: | | IZA Discussion Papers, Forschungsinstitut zur Zukunft der Arbeit (IZA)
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| dp793.pdf | | 367.01 kB | Adobe PDF |
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