Essays on the threat effects of foreign direct investment on labor markets
This dissertation explores the impact of the “threat effects” of foreign direct investment on labor markets in the United States. In this context, the term “threat effect” refers to the use by employers of the implicit or explicit threat that they will move all or part of their production to a different location, even if they do not actually do so. Some economists have argued that increased capital mobility, by making such threats more credible, enhances the bargaining power of employers relative to workers through this threat effect channel. Using game theoretic and econometric analysis I found that the threat effect of capital mobility exerts a large and statistically significant negative influence on wages.
0510: Labor economics