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This paper makes the distinction between micro-focused unions and macro-focused unions, with the latter emphasizing full employment and competitiveness for the economy. It examines the micro-foundation of the macro-focused labor movement, which calls for certain conditions or arrangements conducive to, and the instruments needed for, the establishment and survival of macro-focused unions. The consequences and outcomes in an industrial relations regime in which macro-focused unions prevail are also examined, and measures for countering the free rider problem suggested. The main conclusion is that a macro-focused labor movement is a strategic partner with the government in enhancing international competitiveness, an option which is superior to an exchange rate policy.

We apply insights from the heterogeneous firms' literature to an empirical investigation of wage inequality in China, focusing on the potential influences of foreign direct investment (FDI) and trade. Using firm-level data, we examine intra-sectoral wage inequality in a major industrial region with firms identified according to five firm ownership types and three exporter status types. We find large ownership-type wage premiums separate from other observable influences on wages, including a firm's exporter status. Our results indicate that ownership type matters more than exporter status as a determinant in explaining intra-sectoral wage inequality in China's Yangtze River Delta (YRD). We also find evidence of asymmetric wage effects of firm type by exporter status and by other wage determinants.

We develop a two-country model with heterogeneous producers and rent sharing at the firm level. We identify two sources of a multinational wage premium: A composition pay higher wages, and a firm-level wage effect, because a firm makes higher global profits and thus pays higher wages in its home market when becoming multinational. With two identical countries, the wage premium is fully explained by firm characteristics. Allowing for technology differences between countries, a residual wage premium exists in the technologically backward country, but not in the advanced country.