Dewit, Gerda and Leahy, Dermot and Montagna, Catia
(2013)
Employment Protection, Flexibility and Firms’ Strategic
Location Decisions under Uncertainty.
Economica, 80.
pp. 441-474.
ISSN 0013-0427
Abstract
We construct a model in which oligopolistic firms decide between locating
in a country where employment protection implies costly output adjustments and in
one without employment protection. Using a two-period three-stage game with
uncertainty, we demonstrate that location is influenced by both flexibility and
strategic concerns. The strategic effects under Cournot work towards domestic
anchorage in the country with employment protection while those under Bertrand do
not. Strategic agglomeration can occur in the inflexible country under Cournot and
even under Bertrand, provided uncertainty and foreign direct investment costs are
low.
| Item Type: |
Article
|
| Additional Information: |
Preprint version of published article which is available at Dewit, G., Leahy, D. and Montagna, C. (2013) 'Employment Protection, Flexibility and Firms' Strategic Location Decisions under Uncertainty'. ECONOMICA, 80:441 - 474. This preprint is a SIRE Discussion Paper SIRE-DP-2012-24, published by the Scotting Institute for Research in Economics (2012). |
| Keywords: |
Employment Protection; Flexibility; Foreign Direct Investment; Location; Strategic Behaviour; Uncertainty; |
| Academic Unit: |
Faculty of Social Sciences > Economics, Finance and Accounting |
| Item ID: |
4857 |
| Identification Number: |
https://doi.org/10.1111/ecca.12006 |
| Depositing User: |
Gerda Dewit
|
| Date Deposited: |
02 Apr 2014 13:29 |
| Journal or Publication Title: |
Economica |
| Publisher: |
Wiley |
| Refereed: |
No |
| URI: |
|
| Use Licence: |
This item is available under a Creative Commons Attribution Non Commercial Share Alike Licence (CC BY-NC-SA). Details of this licence are available
here |
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