@TechReport{iza:izadps:dp793,
            	author={Palokangas, Tapio K.},
            	title={Foreign Direct Investment, Labour Market Regulation and Self-Interested Governments},
            	year={2003},
	month={Jun},
            	institution={Institute of Labor Economics (IZA)},
            	address={Bonn},
            	type={IZA Discussion Paper},
            	number={793},
            	url={https://www.iza.org/index.php/publications/dp793},
	abstract={This document examines foreign direct investment (FDI) when multinationals and labour
unions bargain over labour contracts and lobby the self-interested government for taxation
and labour market regulation. We demonstrate that right-to-manage bargaining predicts
higher returns for FDI than does non-unionization or efficient bargaining. This advantage is
further magnified in the presence of credible wage contracts. When the labour market is nonunionized,
or there is a bargain over employment, the ruling elite reaps the surplus of FDI
through taxation or regulation. In the absence of credible contracts, unions have incentives to
claim a bigger share of the revenue of FDI.},
	keywords={lobbying;labour market regulation;foreign direct investment},
            }