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Markups, bargaining power and offshoring: An empirical assessment

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  • Lourdes Moreno

    (Universidad Complutense de Madrid and GRIPICO)

  • Diego Rodríguez

    (Universidad Complutense de Madrid and GRIPICO)

Abstract

This paper tests the pro-competitive effect of imports on product and labour markets for Spanish manufacturing firms in the period 1990-2005. In doing so, it takes into account the type of imported products: final vs intermediate. Markups are estimated following the procedure suggested by Roeger (1995) and including an efficient bargaining model. The observed heterogeneity among firms is parameterized to consider additional product standardization and market concentration. The results support the Imports as Market Discipline hypothesis for importers of final goods, while firms that offshore intermediate inputs show similar markups to non-importers. Additionally, the union bargaining power is smaller the more final-goods oriented imports are and the more homogeneous is the type of goods elaborated by firms.

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Bibliographic Info

Paper provided by Asociación Española de Economía y Finanzas Internacionales in its series Working Papers with number 10-05.

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Length: 40 pages
Date of creation: Sep 2010
Date of revision:
Handle: RePEc:aee:wpaper:1005

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Keywords: Markups; Offshoring; Bargaining power.;

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References

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  1. Levinsohn, J., 1991. "Testing the Imports-As-Market-Discipline Hypothesis," Working Papers 272, Research Seminar in International Economics, University of Michigan.
  2. Lourdes Moreno Martín & Diego Rodríguez Rodríguez, 2000. "Domestic and foreign price-marginal cost margins: an application to Spanish manufacturing firms," Working Papers 00-03, Asociación Española de Economía y Finanzas Internacionales.
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Citations

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Cited by:
  1. Leahy, Dermot & Montagna, Catia, 2012. "Strategic investment and international outsourcing in unionised oligopoly," Labour Economics, Elsevier, vol. 19(2), pages 260-269.
  2. João Amador & Ana Cristina Soares, 2013. "Competition in the portuguese economy: Estimated price-cost margins under imperfect labour markets," Working Papers w201308, Banco de Portugal, Economics and Research Department.
  3. Corchón, Luis C. & Moreno, L., 2010. "Interpreting markups in Spanish manufacturing: The exponential model," MPRA Paper 26609, University Library of Munich, Germany.
  4. Dumont, Michel & Rayp, Glenn & Willemé, Peter, 2012. "The bargaining position of low-skilled and high-skilled workers in a globalising world," Labour Economics, Elsevier, vol. 19(3), pages 312-319.
  5. Domenico Buccella, 2011. "Labor unions and economic integration: A review," Económica, Departamento de Economía, Facultad de Ciencias Económicas, Universidad Nacional de La Plata, vol. 0, pages 25-89, January-D.
  6. M. Dumont & G. Rayp & P. Willemé, 2010. ""Ménage à trois" in a globalizing world: bargaining between firms, low-skilled and high-skilled workers," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 10/687, Ghent University, Faculty of Economics and Business Administration.

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