Rent Sharing with Footloose Production. Foreign Ownership and Wages Revisited.

34 Pages Posted: 30 Oct 2014

See all articles by Ragnhild Balsvik

Ragnhild Balsvik

Norwegian School of Economics (NHH) - Department of Economics

Morten Sæthre

Norwegian School of Economics (NHH)

Date Written: September 16, 2014

Abstract

We present a bargaining model of wage and employment determination, where we show that foreign acquisitions might hurt the bargaining outcome of powerful unions by giving the firm a credible threat to move production abroad. Using detailed data on firms and workers in manufacturing, including information on union membership and foreign ownership, we find, in line with the predictions of our model, that foreign acquisitions negatively impact the outcome of workers in highly unionized plants.

Suggested Citation

Balsvik, Ragnhild and Sæthre, Morten, Rent Sharing with Footloose Production. Foreign Ownership and Wages Revisited. (September 16, 2014). NHH Dept. of Economics Discussion Paper No. 30/2014, Available at SSRN: https://ssrn.com/abstract=2515885 or http://dx.doi.org/10.2139/ssrn.2515885

Ragnhild Balsvik (Contact Author)

Norwegian School of Economics (NHH) - Department of Economics ( email )

Helleveien 30
N-5035 Bergen
Norway

Morten Sæthre

Norwegian School of Economics (NHH) ( email )

Helleveien 30
Bergen, NO-5045
Norway

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