%0 Report
        %A Palokangas, Tapio K.
        %T Foreign Direct Investment, Labour Market Regulation and Self-Interested Governments
        %D 2003
        %8 2003 Jun
        %I Institute of Labor Economics (IZA)
        %C Bonn
        %7 IZA Discussion Paper
        %N 793
        %U https://www.iza.org/index.php/publications/dp793
        %X 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.
        %K lobbying
%K labour market regulation
%K foreign direct investment