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Union Wage Strategies and International Trade

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Author Info
Naylor, Robin

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Abstract

The author characterizes a full set of possible international trade regimes for different combinations of wages in a two-country model of oligopoly with a homogeneous product. He shows that the nature of any equilibrium trade will be either interindustry (one-way) or intraindustry (two-way) depending on (endogenous) union choices between high- and low-wage strategies. The author shows that intraindustry trade is the more likely the lower are trade costs and that, under intraindustry trade, falling trade costs lead monopoly unions to set higher wages, but the opposite obtains under interindustry trade.

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Publisher Info
Article provided by Royal Economic Society in its journal The Economic Journal.

Volume (Year): 109 (1999)
Issue (Month): 452 (January)
Pages: 102-25
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Handle: RePEc:ecj:econjl:v:109:y:1999:i:452:p:102-25

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  1. Lommerud, Kjell Erik & Meland, Frode & Sorgard, Lars, 2002. "Unionized Oligopoly, Trade Liberalization and Location Choice," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
    Other versions:
  2. Torben Andersen & Jan Skaksen, 2007. "Labour Demand, Wage Mark-ups and Product Market Integration," Journal of Economics, Springer, vol. 92(2), pages 103-135, October. [Downloadable!] (restricted)
  3. Amy J. Glass & Kamal Saggi, 2005. "Exporting versus Direct Investment under Local Sourcing," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 141(4), pages 627-647, December. [Downloadable!] (restricted)
    Other versions:
  4. Alain Borghijs & Sjef Ederveen & Ruud de Mooij, 2003. "European Wage Coordination: Nightmare or dream to come true?," Economics Working Papers 020, European Network of Economic Policy Research Institutes. [Downloadable!]
  5. Alain Borghijs & Sjef Ederveen & Ruud de Mooij, . "European wage coordination: Nightmare or dream to come true? An economic analysis of wage bargaining institutions in the EU," CPB Discussion Papers 17, CPB Netherlands Bureau for Economic Policy Analysis. [Downloadable!]
  6. Robin Naylor, 1999. "Endogenous determination of trade regime and bargaining outcome," Working Paper CRENoS 199910, Centre for North South Economic Research, University of Cagliari and Sassari, Sardinia. [Downloadable!]
    Other versions:
  7. Kjell Erik Lommerud & Frode Meland & Odd Rune Straume, 2005. "Can Deunionization Lead to International Outsourcing?," CESifo Working Paper Series CESifo Working Paper No. , CESifo Group Munich. [Downloadable!]
    Other versions:
  8. Naylor, Robin, 2002. "The Effects Of Entry In Bilateral Oligopoly," The Warwick Economics Research Paper Series (TWERPS) 638, University of Warwick, Department of Economics. [Downloadable!]
  9. BACCHIEGA, Emanuele, 2004. "Vertical differentiation, wage bargaining and intra-industry trade liberalization," CORE Discussion Papers 2004028, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE). [Downloadable!]
  10. David Collie & Hylke Vandenbussche, 2005. "Can Import Tariffs Deter Outward FDI?," Open Economies Review, Springer, vol. 16(4), pages 341-362, October. [Downloadable!] (restricted)
  11. Jakob Munch & Jan Sørensen, 2000. "Competitiveness and Integration of Product Markets," Open Economies Review, Springer, vol. 11(4), pages 359-381, October. [Downloadable!] (restricted)
  12. Collie, David R & Vandenbussche, Hylke, 2001. "Trade, FDI and Unions," CEPR Discussion Papers 2772, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  13. Aditya Bhattacharya, 2008. "Import Quotas, Export Promotion and Intra-industry Trade," Working Papers id:1626, esocialsciences.com. [Downloadable!]
  14. Odd Rune Straume, 2006. "Product Market Integration and Environmental Policy Coordination in An International Duopoly," Environmental & Resource Economics, European Association of Environmental and Resource Economists, vol. 34(4), pages 535-563, August. [Downloadable!] (restricted)
  15. Domenico Buccella, . "International Production and Welfare Distribution Under Different Union Wage Settings," FIW Working Paper series 025, FIW. [Downloadable!]
  16. Sapir, André, 2000. "Who is Afraid of Globalization? The Challenge of Domestic Adjustment in Europe and America," CEPR Discussion Papers 2595, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
  17. M. Correa-López, 2006. "A model of unionized oligopoly in general equilibrium," The School of Economics Discussion Paper Series 0605, Economics, The University of Manchester. [Downloadable!]
  18. López, Mónica Correa & Nayor, Robin A., 2002. "The Cournot-Bertrand Profit Differential : A Reversal Result In A Differentiated Duopoly With Wage Bargaining," The Warwick Economics Research Paper Series (TWERPS) 631, University of Warwick, Department of Economics. [Downloadable!]
  19. Damiaan Persyn, 2006. "Trade and Race-to-the-bottom Wage Competition," LICOS Discussion Papers 17306, LICOS - Centre for Institutions and Economic Performance, K.U.Leuven. [Downloadable!]
  20. Lommerud, Kjell Erik & Meland, Frode & Straume, Odd Rune, 2005. "Globalization and Union Opposition to Technological Change," CEPR Discussion Papers 4836, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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