In this paper we investigate tax/subsidy competition for FDI between countries of different size when a domestic firm is the incumbent in the largest market. We investigate how the nature (public or private) of the incumbent firm affects policy competition between the two governments seeking to...

This paper examines the effect of foreign direct investment (FDI) on home wages by using a model assuming that two complementary intermediate goods are combined into a final product by an international/domestic division of labour. We find that FDI triggers higher (lower) home wages in the case...

An interesting finding of recent research is that strategic considerations and collective bargaining structures often influence foreign direct investment. In this paper, I argue that union support for the decentralisation of collective bargaining may be an optimal response to the growing global...

This paper develops a game where the government pursues an optimal monetary policy, monopolistic trade unions set nominal wages, and firms (domestic and multinationals) choose the levels of employment and output in the economy. Employment, output, and nominal wages are affected by the nominal...

In this paper, we investigate how de facto financial globalization has influenced the labor share in developing countries. Our main argument is the need to distinguish between different types of capital in this context, as different forms of foreign investment have different fixed costs and...