Abstract

http://ssrn.com/abstract=1586768
 


 



Unionized Wage Setting and the Location of Firms


Karolien De Bruyne


KU Leuven - Center for Economic Studies

September 2009

VIVES Discussion Paper No. 9

Abstract:     
We analyze how unionized wage setting affects the location of firms. We find that the degree of 'centralization' (at firm or sectoral level) and 'regionalization' (at regional or supra-regional level) is crucial. We show that wage setting at the firm level is the best policy to attract firms when trade costs are low, while wage setting at a more centralized level is most effective to attract firms when trade costs are high. Moreover, wage setting at the supra-regional level is beneficial for the already more agglomerated region and hurts the peripheral region.

Number of Pages in PDF File: 33

Keywords: location, unions, regionalization, centralization

JEL Classification: J51, R12, R3, F12

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Date posted: April 12, 2010  

Suggested Citation

De Bruyne, Karolien, Unionized Wage Setting and the Location of Firms (September 2009). VIVES Discussion Paper No. 9. Available at SSRN: http://ssrn.com/abstract=1586768 or http://dx.doi.org/10.2139/ssrn.1586768

Contact Information

Karolien De Bruyne (Contact Author)
KU Leuven - Center for Economic Studies ( email )
Naamsestraat 69
Leuven, B-3000
Belgium
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