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The Effects of Globalisation on Unions and the Nature of Collective Bargaining

Author

Listed:
  • Gaston, Noel

    (Bond University)

Abstract
An interesting finding of recent research is that strategic considerations and collective bargaining structures often influence foreign direct investment. In this paper, I argue that union support for the decentralisation of collective bargaining may be an optimal response to the growing global nature of the firms that employ their members. I show that unions prefer a more wage-oriented bargaining posture if their members are faced with a greater outsourcing threat. The model is able to rationalise the empirically insignificant effects of outsourcing on wages. The findings are also consistent with the growing wage inequality and falling union membership that some countries have experienced since implementing more decentralised forms of collective bargaining.

Suggested Citation

  • Gaston, Noel, 2002. "The Effects of Globalisation on Unions and the Nature of Collective Bargaining," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 17, pages 377-396.
    • Handle: RePEc:ris:integr:0200
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    Citations

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    Cited by:

    1. Torben M. Andersen, 2003. "Wage formation and European integration," European Economy - Economic Papers 2008 - 2015 188, Directorate General Economic and Financial Affairs (DG ECFIN), European Commission.
    2. Uwe Jirjahn & Steffen Mueller, 2014. "Non-union worker representation, foreign owners, and the performance of establishments," Oxford Economic Papers, Oxford University Press, vol. 66(1), pages 140-163, January.
    3. Aronsson, Thomas & Koskela, Erkki, 2008. "Optimal Redistributive Taxation and Provision of Public Input Goods in an Economy with Outsourcing and Unemployment," Umeå Economic Studies 759, Umeå University, Department of Economics.
    4. Wolf-Heimo Grieben & Fuat Sener, 2009. "Labor Unions, Globalization, and Mercantilism," CESifo Working Paper Series 2889, CESifo.
    5. Carluccio, Juan & Bas, Maria, 2015. "The impact of worker bargaining power on the organization of global firms," Journal of International Economics, Elsevier, vol. 96(1), pages 162-181.
    6. Ken-ichi Hashimoto, 2015. "Tariffs, Offshoring and Unemployment in A Two-Country Model," The Japanese Economic Review, Japanese Economic Association, vol. 66(3), pages 371-392, September.
    7. Carsten Eckel & Hartmut Egger, 2006. "Wage Bargaining and Multinational Firms in General Equilibrium," CESifo Working Paper Series 1711, CESifo.
    8. Hartmut Egger & Udo Kreickemeier, 2017. "International Fragmentation: Boon or Bane for Domestic Employment?," World Scientific Book Chapters, in: International Trade and Labor Markets Welfare, Inequality and Unemployment, chapter 9, pages 237-263, World Scientific Publishing Co. Pte. Ltd..
    9. repec:lic:licosd:21008 is not listed on IDEAS
    10. Verena Dill & Uwe Jirjahn, 2017. "Foreign owners and the quality of industrial relations in Germany," Economic and Industrial Democracy, Department of Economic History, Uppsala University, Sweden, vol. 38(1), pages 5-25, February.
    11. Riedl, Maximilian, 2013. "Wage bargaining, job loss fears and offshoring," University of Göttingen Working Papers in Economics 174, University of Goettingen, Department of Economics.
    12. Lutz Arnold & Stefanie Trepl, 2015. "A North-South Trade Model of Offshoring and Unemployment," Open Economies Review, Springer, vol. 26(5), pages 999-1039, November.
    13. Farrell, Roger & Gaston, Noel & Sturm, Jan-Egbert, 2004. "Determinants of Japan's foreign direct investment: An industry and country panel study, 1984-1998," Journal of the Japanese and International Economies, Elsevier, vol. 18(2), pages 161-182, June.

    More about this item

    Keywords

    outsourcing; wage bargaining; foreign direct investment;
    All these keywords.

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • J41 - Labor and Demographic Economics - - Particular Labor Markets - - - Labor Contracts
    • J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects

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