Unionized Oligopoly, Trade Liberalization and Location Choice

31 Pages Posted: 24 Oct 2001

See all articles by Kjell Erik Lommerud

Kjell Erik Lommerud

University of Bergen - Department of Economics; Centre for Economic Policy Research (CEPR); CESifo (Center for Economic Studies and Ifo Institute)

Frode Meland

University of Bergen - Department of Economics

Lars Sorgard

Norwegian School of Economics and Business Administration (NHH); Norwegian School of Economics (NHH) - Department of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: October 2001

Abstract

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 a unionized firm to move all production abroad. This cannot prevail in a corresponding, non-unionized model. Trade liberalization has a non-monotonic effect on wages. For a given location choice, trade liberalization increases national welfare in the unionized country. When a shift of some or all production to the foreign country occurs, national welfare can be reduced.

Keywords: Unionized oligopoly, trade liberalization, foreign direct investments

JEL Classification: F15, F16, F21, J51, L13

Suggested Citation

Lommerud, Kjell Erik and Meland, Frode and Sorgard, Lars, Unionized Oligopoly, Trade Liberalization and Location Choice (October 2001). Available at SSRN: https://ssrn.com/abstract=288099

Kjell Erik Lommerud (Contact Author)

University of Bergen - Department of Economics ( email )

Fosswinckelsgt. 6
N-5007 Bergen, 5007
Norway
+47 5 558 9209 (Phone)
+47 5 558 9210 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

CESifo (Center for Economic Studies and Ifo Institute)

Poschinger Str. 5
Munich, DE-81679
Germany

Frode Meland

University of Bergen - Department of Economics ( email )

Fosswinckelsgt. 6
N-5007 Bergen, 5007
Norway
+47 5 558 9230 (Phone)
+47 5 558 9210 (Fax)

Lars Sorgard

Norwegian School of Economics and Business Administration (NHH) ( email )

Helleveien 30
Bergen, NO-5045
Norway
+47 5 595 9723 (Phone)
+47 5 595 9543 (Fax)

Norwegian School of Economics (NHH) - Department of Economics

Helleveien 30
N-5035 Bergen
Norway

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
17
Abstract Views
1,489
PlumX Metrics