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Trade Unions, Wage Bargaining Co-ordination and Foreign Direct Investment
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Dr Roxana Radulescu
Dr Martin Robson
Radulescu R, Robson M
Newcastle Discussion Papers in Economics
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Conventional wisdom asserts that high trade union bargaining strength and a system of co-ordinated wage bargaining tend to reduce the attractiveness of an economy as a location for foreign direct investment. However, empirical evidence on these issues is rather limited. This study provides further evidence on the issues through an econometric analysis of the determinants of inflows of foreign direct investment based on panel data for 20 OECD economies. In particular, the study examines the proposition that there may be interaction effects in the relationship between trade union bargaining strength, bargaining co-ordination and the incentives for foreign direct investment.
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