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

Cooke, William N.

doi:10.2307/2525031

Cited by 89 publications

(103 citation statements)

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“…Interestingly, this work has typically found that host country wages either are not a statistically significant determinant of MNCs' production location decisions or are a statistically significant determinant but with the "wrong" sign. That is, conditional on other control variables, the correlation between the amount of capital, employment, or production MNCs locate in a country, and the average wage rate in the country, is usually found to be essentially zero or even positive (see, for example , Swedenborg 1979;Dunning 1980;Cooke 1997;Cooke and Noble 1998). 2 Findings of zero or positive correlations between MNC investments and wage rates across countries have been viewed as anomalous given the widespread expectation that, ceteris paribus, returns on investment should be greater in countries with lower labor costs.…”

Section: *Mario Bognanno Is Professor In the Industrialmentioning

confidence: 99%

“…As we discuss below, however, there are important reasons to examine FDI levels as well as flows. The papers by Cooke (1997), Cooke and Noble (1998), and Cooke (2001) used cross-sectional data at the country/industry level, and found evidence that IR systems affect the allocation of MNC assets across countries. To our knowledge, our paper is the first to use industry-level panel data to address these issues.…”

Section: *Mario Bognanno Is Professor In the Industrialmentioning

confidence: 99%

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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: *Mario Bognanno Is Professor In the Industrialmentioning

confidence: 99%

Section: *Mario Bognanno Is Professor In the Industrialmentioning

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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“…1 Examining the interaction effect of foreign ownership with works councils is particularly interesting. Works councils have attracted considerable attention as an alternative form of worker representation to improve both the quality of (Cooke, 1997;Bognanno et al, 2005;Hamm and Kleiner, 2007). Other studies investigate the effect of FDI on domestic unionization (Cooke, 2001;Dreher and Gaston, 2007;Slaughter, 2007) and the desire of workers for works councils (Addison et al, 2003;Schmitt, 2003).…”

Section: Introductionmentioning

confidence: 99%

Non-union worker representation, foreign owners, and the performance of establishments

Jirjahn

Mueller

2012

Oxford Economic Papers

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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 productivity in foreign-owned establishments. Our results conform to the notion that foreign ownership can involve strong tensions with the institutional patterns of the host country.JEL classifications: J53, J54, M54.

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“…One particular dimension relates to MNC decisions on where to locate foreign operations (Cooke & Noble, 1998). Here, we find considerable international evidence to suggest that industrial relations systems, and particularly the level of institutional constraint on management decision-making and choice, can significantly influence the location decisions of MNCs (Cooke, 2003;Kleiner & Ham, 2003).…”

Section: Discussionmentioning

confidence: 93%

Subtle but deadly? union avoidance through “double breasting” among multinational companies

Gunnigle¹,

Lavelle²,

McDonnell³

2009

Advances in Industrial and Labor Relations

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This paper examines the use of so called 'double breasting' as a means of union avoidance among multinational companies (MNCs). Double breasting refers to the practice whereby multi-establishment organizations simultaneously operate establishments on both a union and non-union basis. Using survey data from the largest and most representative empirical investigation of employment practice in MNCs in Ireland to date and supplemented by qualitative data gathered from case based investigations in the subsidiary operations of American owned MNCs, we profile the incidence and pattern of this particular form of union avoidance as well as providing insights on management's rationale for so doing. Our findings suggest that a substantial and increasing number of unionized MNCs in Ireland are engaging in double breasting. This phenomenon is most evident among U.S. MNCs. We also find that employers, at both local and global level, has proactively initiated double breasting as a strategic ploy to increase management prerogative and better position subsidiary operations to attract new investment from corporate levels.

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

Cited by 89 publications

References 0 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

Non-union worker representation, foreign owners, and the performance of establishments

Subtle but deadly? union avoidance through “double breasting” among multinational companies

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