Strategic trade and FDI policies in a unionized industry

Authors

  • Domenico Buccella

DOI:

https://doi.org/10.18559/ebr.2019.1.2

Keywords:

strategic trade policy, FDI policy, unionized markets

Abstract

This paper analyzes the differences between strategic trade and the competition policies (in the form of inward Foreign Direct Investment) to regulate a unionized monopoly in the domestic country. With decentralized negotiations both policies reduce labour and product market distortions. However the fixed cost for the foreign entrant and the degree of product differentiation determine which policy should be implemented to maximize national welfare, and the cases in which the domestic government can intervene, to achieve a Pareto-improvement.

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Published

2019-03-30

Issue

Section

Research article- regular issue

How to Cite

Buccella, D. (2019). Strategic trade and FDI policies in a unionized industry. Economics and Business Review, 5(1), 12-31. https://doi.org/10.18559/ebr.2019.1.2

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