This paper investigates the effects of different degrees of wage setting centralisation on the incentive of a MNE to locate in a host country, and on the host country's welfare. Decentralised and centralised wage bargaining are considered. The nature of product market competition between the MNE...

We construct a partial equilibrium model of intra-industry cross-hauling DFI with unionized duopoly, where wages and employment are determined through Nash bargaining between firms and national labor unions. We show that under symmetry, cross-hauling DFI is the unique Nash equilibrium, in which...