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Leahy, Dermot and Montagna, Catia (2012) Strategic investment and international outsourcing in unionised oligopoly. Labour Economics, 19 (2). pp. 260-269. ISSN 0927-5371
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Abstract
We develop an oligopoly model in which
fi
rms facing unionised domestic labour markets choose between
producing an intermediate good in-house and outsourcing it to a non-unionised foreign supplier that
makes a relationship-speci
fi
c investment in developing the intermediate. The paper sheds light on the
issue of whether international outsourcing offers a means to
‘
escape
’
the power of domestic unions and on
the existence of intra-industry wage dispersion. We show that outsourcing typically increases marginal
costs even when it lowers union wages. Despite this, more powerful unions increase the incentive to
outsource.
| Item Type: | Article |
|---|---|
| Keywords: | Outsourcing; Unionisation; Wage dispersion; Strategic investment; Oligopol; |
| Academic Unit: | Faculty of Social Sciences > Economics, Finance and Accounting |
| Item ID: | 5724 |
| Identification Number: | 10.1016/j.labeco.2011.11.003 |
| Depositing User: | Dermot Leahy |
| Date Deposited: | 23 Jan 2015 11:46 |
| Journal or Publication Title: | Labour Economics |
| Publisher: | Elsevier |
| Refereed: | Yes |
| Related URLs: | |
| URI: | https://mural.maynoothuniversity.ie/id/eprint/5724 |
| 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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