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Essays on the threat effects of foreign direct investment on labor markets

Minsik Choi, University of Massachusetts Amherst


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.

Subject Area

Economics|Labor economics

Recommended Citation

Choi, Minsik, "Essays on the threat effects of foreign direct investment on labor markets" (2002). Doctoral Dissertations Available from Proquest. AAI3056211.