North–South technology transfer in unionised multinationals

Abstract

Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. We study how incentives for North-South technology transfers in multinational enterprises are affected by labour market institutions. If workers are collectively organised, incentives for technology transfers are partly governed by firms' desire to curb trade union power. This will affect not only the extent but also the type of technology transfer. While skill upgrading of southern workers benefits these workers at the expense of northern worker welfare, quality upgrading of products produced in the South may harm not only northern but also southern workers. A minimum wage policy to raise the wage levels of southern workers may spur technology transfer, possibly to the extent that the utility of northern workers decline. These conclusions are reached in a setting where a unionised multinational multiproduct firm produces two vertically differentiated products in northern and southern subsidiaries, respectively. Terms of use: Documents inJEL-Code: F23, J51, O33.

Endogenous quality choice under upstream market power

“…A similar result is obtained in Lommerud et al . (). They analyze technology transfer by a multinational firm with two plants, one of them in a developed country (unionized) and the other one in a developing region (not unionized).…”

“…Lommerud et al . () use a positive to capture the bargaining power of a trade union in a developed country, and a in a developing one. I use the same in both countries as they are in the same region.…”

“…Lommerud et al . () analyze the impact of trade unions on the incentives for North–South technology transfers in multinational enterprises. They assume that only the North is unionized, so wages in the South are competitive.…”

“…Lommerud et al . () study the impact of labor market institutions on the incentives for North–South technology transfers in multinational firms. They use different production functions depending on the location of plants (more productive plants are located in the North).…”

Patterns of technology transfer among the Arab Gulf States: opportunities and challenges

“…Incentives to engage in overseas investment are also influenced by labor market institutions (unions) in the home country. Lommerud et al (2010) argue that if workers in their home country are collectively organized, incentives for technology transfers are governed by firms' desires to curb union power.…”