We study the effect of worker bargaining power on global firms' boundaries. Our theory posits that outsourcing weakens the workers' bargaining position by limiting the revenues subject to worker extraction. Furthermore, when capital is relationship-specific, outsourcing reduces the firm's...

How does the bargaining power of firms affect trade policy? We address this question in an international, bilateral oligopoly setting where the Home country specializes in final goods and the Foreign country specializes in intermediate inputs. A matched Home-Foreign pair bargains simultaneously...

It is often argued that multinationals are reluctant to transfer technology due to the fear of spillovers. We show that this need not be the case if host country policies like taxation are taken into account. Furthermore, we examine the incentives the multinational and the host country have to...