CROSS-HAULING DIRECT FOREIGN-INVESTMENT AND UNIONIZED OLIGOPOLY

We construct a partial equilibrium model of intra-industry cross-hauli ng DFI with unionized duopoly, where wages and employment are determin ed through Nash bargaining between firms and national labor unions. We show that under symmetry, cross-hauling DFI is the unique Nash equili brium, in which the negotiated wage decreases for every level of emplo yment and each firm's profit increases. Cross-hauling DFI increases (d ecreases) employment and national welfare if the union is wage (employ ment) oriented.