سرمایه گذاری استراتژیک و برون سپاری بین المللی در اتحادیه ی انحصار چند جانبه

We develop an oligopoly model in which firms facing unionised domestic labour markets choose between producing an intermediate good in-house and outsourcing it to a non-unionised foreign supplier that makes a relationship-specific investment in developing the intermediate. The paper sheds light on the issue of whether international outsourcing offers a means to ‘escape’ the power of domestic unions and on the existence of intra-industry wage dispersion. We show that outsourcing typically increases marginal costs even when it lowers union wages. Despite this, more powerful unions increase the incentive to outsource.

This paper develops an oligopoly model in which firms facing unionised domestic labour markets choose between producing an intermediate good in-house and outsourcing1 it to a non-unionised foreign supplier that makes a relationship-specific investment in developing the intermediate. The process of globalisation of goods and services markets and improvements in the technology of communication has been accompanied by a deepening in international specialisation and a tendency towards a vertical fragmentation of production across national borders. As a result, the ‘make-or-buy’ internalisation choice of firms (i.e. whether to produce an intermediate in-house or outsource it to an upstream supplier) is increasingly international in nature — as outsourcing is directed towards suppliers located abroad. In this context, the role of labour markets in influencing the mode-of-operation decision of firms has attracted increasing attention in public and policy debates. The conventional wisdom that emerges from these debates suggests that international outsourcing may be used by firms as a way to ‘escape’ distorted domestic labour markets. Specifically, given the still significant role played by unionisation in many industrialised economies, it has been suggested that outsourcing may represent a means to weaken trade unions2 and that strong unions may make outsourcing more attractive. More generally, these views are consistent with the widespread perception that international market integration erodes the power of domestic unions — e.g. Rodrik (1997) and Brown et al. (2009). The key argument underlying this conventional wisdom is that the internationalisation of economies allows for an easier replacement of domestic workers by foreign workers — be it via final good import competition or via the international fragmentation of the vertical production chain. However, a key feature of outsourcing is that it does not necessarily only involve substitute activities but also ones that complement those that a firm continues to perform in the domestic economy — and this can have significant effects on the behaviour of unions.

This paper develops an oligopoly model in which firms facing unionised domestic labour markets choose between producing an intermediate good in-house and outsourcing1 it to a non-unionised foreign supplier that makes a relationship-specific investment in developing the intermediate. The process of globalisation of goods and services markets and improvements in the technology of communication has been accompanied by a deepening in international specialisation and a tendency towards a vertical fragmentation of production across national borders. As a result, the ‘make-or-buy’ internalisation choice of firms (i.e. whether to produce an intermediate in-house or outsource it to an upstream supplier) is increasingly international in nature — as outsourcing is directed towards suppliers located abroad. In this context, the role of labour markets in influencing the mode-of-operation decision of firms has attracted increasing attention in public and policy debates. The conventional wisdom that emerges from these debates suggests that international outsourcing may be used by firms as a way to ‘escape’ distorted domestic labour markets. Specifically, given the still significant role played by unionisation in many industrialised economies, it has been suggested that outsourcing may represent a means to weaken trade unions2 and that strong unions may make outsourcing more attractive. More generally, these views are consistent with the widespread perception that international market integration erodes the power of domestic unions — e.g. Rodrik (1997) and Brown et al. (2009). The key argument underlying this conventional wisdom is that the internationalisation of economies allows for an easier replacement of domestic workers by foreign workers — be it via final good import competition or via the international fragmentation of the vertical production chain. However, a key feature of outsourcing is that it does not necessarily only involve substitute activities but also ones that complement those that a firm continues to perform in the domestic economy — and this can have significant effects on the behaviour of unions.