User menu

Accès à distance ? S'identifier sur le proxy UCLouvain

investment and technological choice in a right-to-manage model

Primary tabs

download
  • Open access
  • PDF
  • 1.15 M
Fagnart, Jean-François [FUSL] Germain, Marc [Université de Lille 3]

We analyse the interactions between investment and local wage bargaining in a putty-clay model where the investment decision commits the firm to a particular capital intensity. This technological pre-commitment is used strategically in order to manipulate the bargaining outcome. We show that this strategic behaviour induces a non-monotonic relationship between the capital-and-labour demands of the firm and most of her environmental parameters (a.o. the bargaining power of the union, her minimum wage requirement, the capital cost,...). The results we obtain in our putty-clay framework thus contradicts several conclusions of the standard literature on wage bargaining and investment.

Document type Article de périodique (Journal article) – Article de recherche
Access type Accès libre
Publication date 1997
Language Anglais
Journal information "Journal of Economics" - Vol. 66, no.3, p. 223-247 (NaN)
Peer reviewed yes
Publisher Springer Verlag
issn 0931-8658
e-issn 1617-7134
Publication status Publié
Affiliations USL-B - Centre de Recherche en Economie (CEREC)
UCL - MD/ESP - Ecole de santé publique
Keywords putty-clay technology ; wage bargaining ; union power
Links
  1. Anderson, S., and Devereux, M. (1988): ?Trade Unions and the Choice of the Capital Stock.?Scandinavian Journal of Economics 90: 27?44.
  2. Baldwin, C. Y. (1983): ?Productivity and Labor Unions: an Application of the Theory of Self-enforcing Contracts.?Journal of Business 56: 155?185.
  3. de la Croix, D., and Licandro, O. (1995): ?Underemployment, Capital Irreversibility and Growth under Trade Unionism.?Scandinavian Journal of Economics 97: 385?399.
  4. Devereux, M., and Lockwood, B. (1991): ?Trade Unions, Non-binding Wage Agreements, and Capital Accumulation.?European Economic Review 35: 1411?1426.
  5. Eberwein, C., and Kollintzas, T. (1995): ?A Dynamic Model of Bargaining in a Unionized Firm with Irreversible Investment.?Annales d'économie et de statistique 37/38: 91?115.
  6. Espinoza, M. P., and Rhee, C. (1989): ?Efficient Wage Bargaining as a Repeated Game.?Quarterly Journal of Economics 104: 565?588.
  7. Grout, P. (1984): ?Investment and Wages in the Absence of Binding Contracts.?Econometrica 52: 449?460.
  8. Hoel, M. (1990): ?Local versus Central Wage Bargaining with Endogenous Investments.?Scandinavian Journal of Economics 92: 453?469.
  9. Manning, A. (1987): ?An Integration of Trade Union Models in a Sequental Bargaining Framework.?Economic Journal 97: 121?139.
  10. ? (1994): ?How Robust Is the Microeconomic Theory of the Trade Union.?Journal of Labour Economics 12: 430?459.
  11. van der Ploeg, F. (1987): ?Trade Unions, Investment and Unemployment: a Non Cooperative Approach.?European Economic Review 31: 1469?1492.
Bibliographic reference Fagnart, Jean-François ; Germain, Marc. investment and technological choice in a right-to-manage model. In: Journal of Economics, Vol. 66, no.3, p. 223-247 (NaN)
Permanent URL http://hdl.handle.net/2078.3/140920