The Impact of Foreign Production on Wage Bargaining in the Home Country

• 발행기관: 한국무역연구원
• 저자명: Sang-Kee Kim
• 간행물 정보: 『무역연구』제13권 제4호, 59~71쪽, 전체 13쪽
• 주제분류: 경제경영 > 무역학
• 파일형태: PDF
• 발행일자: 2017.08.30

영문 초록

We examine the effect of international production relocation on wage bargaining in the home country. We consider the two-stage game. In the first stage, at a domestic plant, a firm and a labor union negotiate over a wage. In the second stage, after observing the negotiated wage, the firm decides where to produce. The most interesting result is that, in choosing a production location, the skewedness of a wage distribution of the foreign country plays a very important role. A more left-skewed wage distribution of a foreign country, implying that most workers in the country are highly likely to receive a low wage, directly reduces the firm’s production cost in the country. Definitely, the reduction in the cost leads to more production and higher profits from foreign production. In response to the increased incentive for foreign production, when the union at a domestic plant bargains over a wage, it should accept a lower wage to secure jobs.

목차

Ⅰ. Introduction

Ⅱ. Literature Review

Ⅲ. The Model

Ⅳ. Conclusion

키워드

International Production Relocation Minimum Wage Offshoring Pareto Distribution Wage Bargaining