U.S. Foreign Production and Unions

Karier, Thomas

doi:10.1111/j.1468-232x.1995.tb00363.x

Cited by 12 publications

(9 citation statements)

References 9 publications

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“…Karier (1995) estimated equations for value added, sales, and employment of foreign affiliates of U.S. MNCs in 32 industries and 10 geographic regions, using data from the BEA's 1982 benchmark survey. He found that unionization rates in host countries were statistically insignificant in the value added and sales equations, and actually were positive and statistically significant in the employment equation.…”

Section: Theoretical and Empirical Literatures On Mnc Behaviormentioning

confidence: 99%

The Influence of Wages and Industrial Relations Environments on the Production Location Decisions of U.S. Multinational Corporations

Bognanno¹,

Keane²,

Yang³

2005

ILR Review

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Using the Benchmark and Annual Surveys of U.S. Direct Investment Abroad collected by the Bureau of Economic Analysis, the authors examine the operations of U.S. multinational corporations (MNCs) in seven manufacturing industries and twenty-two countries over the years 1982-91. They analyze how tariffs, wages, and industrial relations environments influenced U.S. MNCs' decisions about where to locate assets and employment. The results imply that wages and the industrial relations environment were statistically significant determinants of the extent to which MNCs located operations in a particular host country. However, while these factors were important, their impact was much smaller than that of host country market size, which was by far the main determinant of MNC location decisions. Furthermore, the authors find no evidence that tariff reductions increased the share of U.S. MNC activities located abroad. Thus, concerns that tariff reductions may lead to loss of "American jobs" appear to be exaggerated. H ow multinational corporations (MNCs) decide where to locate production has been a subject of considerable interest in recent years. For example, in the debate over the North American Free Trade Agreement (NAFTA), U.S. labor unions and many politicians, as well as some academics, expressed concern that trade liberalization would cause U.S. MNCs to move production facilities from the United States to Mexico, so as to take advantage of lower Mexican wages.1 The basic logic is

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Section: Theoretical and Empirical Literatures On Mnc Behaviormentioning

confidence: 99%

The Influence of Wages and Industrial Relations Environments on the Production Location Decisions of U.S. Multinational Corporations

Bognanno¹,

Keane²,

Yang³

2005

ILR Review

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“…Rodrik (1997) reviews some empirical evidence that suggests harmonization; Cooke (1997) finds U.S. direct foreign investment to be negatively related to unionization, centralized bargaining, restrictions on layoffs and contract extension policies, and positively related to education and works councils; Cooke and Meyer (1990) find import penetration to foster union avoidance strategies; Karier (1995) finds U.S. outward foreign direct investment to be unrelated to domestic unionization rates; Odgers and Betts (1997) find investment in Canadian manufacturing to be deterred by unionization, but not when the industry was already highly unionized; and York (1993) finds evidence of pressure for downward harmonization of corporate tax rates in response to capital mobility.…”

Section: Jurisdictions Must Compete For Investment By Reducing Labourmentioning

confidence: 99%

Harmonization of Labour Policies Under Trade Liberalization

Gunderson¹

1998

Relations industrielles

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“…I find no published research that examines the influence on foreign direct investment of the centralization of contract negotiations, government regulation of layoffs, government extension policies, or works council policies. Only the recent analysis by Karier (1995) examines the influence of union representation on foreign direct investment. Karier found no evidence that average unionization rates across ten geographic regions help explain U.S. outward foreign direct investment patterns.…”

Section: Previous Empirical Researchmentioning

confidence: 99%

The Influence of Industrial Relations Factors on U.S. Foreign Direct Investment Abroad

Cooke¹

1997

ILR Review

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Although managers of multinational companies have identified labor practices and regulations, access to skilled labor, and similar factors as important considerations in foreign direct investment decision-making, few studies have empirically examined the influence of industrial relations factors on foreign direct investment. Applying a transaction costs framework to U.S. Department of Commerce data published in 1992, the author examines the influence of several key industrial relations variables on U.S. foreign direct investment across nine industries and nineteen OECD-member countries. Across the countries studied, U.S. foreign direct investment was negatively affected by the presence of high levels of union penetration, centralized collective bargaining structures, stiff government restrictions on layoffs, and pervasive contract extension policies; it was positively affected by high levels of education and policies requiring works councils.

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U.S. Foreign Production and Unions

Cited by 12 publications

References 9 publications

The Influence of Wages and Industrial Relations Environments on the Production Location Decisions of U.S. Multinational Corporations

The Influence of Wages and Industrial Relations Environments on the Production Location Decisions of U.S. Multinational Corporations

Harmonization of Labour Policies Under Trade Liberalization

The Influence of Industrial Relations Factors on U.S. Foreign Direct Investment Abroad

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