This paper analyzes the influence of the structure of collective wage bargaining on direct investment abroad. A wage negotiations model shows that high productive firms benefit from centralized bargaining and invest therefore less abroad than under dezentralized bargaining. An empirical study...

Using German establishment data, this study provides the first econometric analysis on the interaction of establishment-level codetermination and foreign owners. Works councils are associated with higher productivity in domestic-owned establishments while they are associated with lower...