The Location of Firms in Unionized Countries
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The Location of Firms in Unionized Countries. / Munch, Jakob Roland.
I: Scandinavian Journal of Economics, Bind 105, Nr. 1, 2003, s. 49-71.Publikation: Bidrag til tidsskrift › Tidsskriftartikel › Forskning › fagfællebedømt
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TY - JOUR
T1 - The Location of Firms in Unionized Countries
AU - Munch, Jakob Roland
N1 - JEL classification: F15, J51, R11
PY - 2003
Y1 - 2003
N2 - This paper develops a two-country economic geography model with Cournot competition, where the labor markets are unionized so that trade unions bargain efficiently with each firm over wages and employment. Agglomeration forces are present due to wage premia obtained by the trade unions. It is shown that if the bargaining power of unions differs across countries then, as trade costs are reduced, the country with relatively weak unions gradually acquires all firms. However, for a range of trade costs, it is also a locally stable equilibrium for all firms to locate in the country with strong unions
AB - This paper develops a two-country economic geography model with Cournot competition, where the labor markets are unionized so that trade unions bargain efficiently with each firm over wages and employment. Agglomeration forces are present due to wage premia obtained by the trade unions. It is shown that if the bargaining power of unions differs across countries then, as trade costs are reduced, the country with relatively weak unions gradually acquires all firms. However, for a range of trade costs, it is also a locally stable equilibrium for all firms to locate in the country with strong unions
U2 - 10.1111/1467-9442.00004
DO - 10.1111/1467-9442.00004
M3 - Journal article
VL - 105
SP - 49
EP - 71
JO - Scandinavian Journal of Economics
JF - Scandinavian Journal of Economics
SN - 0347-0520
IS - 1
ER -
ID: 17520012