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Can Market Power influence Employment, Wage Inequality and Growth?

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  • Alberto BUCCI

    ([n.a.])

  • Fabio FIORILLO

    ()
    (Universit… Politecnica delle Marche, Dipartimento di Scienze Economiche e Sociali)

  • Stefano STAFFOLANI

    ()
    (Universita' Politecnica delle Marche, Dipartimento di Economia)

Abstract

We introduce an efficiency wage mechanism into an innovation-driven growth model. Due to asymmetric information problems the labour market is segmented and homogeneous workers may be employed either in the non-competitive intermediate sector or in the competitive research sector. We analyse the impact that the monopoly position enjoyed by intermediate firms in the product market may have on employment, wage inequality and growth, and the sectoral distribution of workers. We find that the lower the product market competition in the capital goods sector, the higher the research employment, the lower the intermediate sector employment and the higher the growth rate. The relationships between growth and inequality, on the one hand, and between growth and employment, on the other, are both negative. Copyright Blackwell Publishing Ltd 2003.

(This abstract was borrowed from another version of this item.)

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File URL: http://docs.dises.univpm.it/web/quaderni/pdf/141.pdf
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Bibliographic Info

Paper provided by Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali in its series Working Papers with number 141.

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Length: 21
Date of creation: Oct 2000
Date of revision:
Handle: RePEc:anc:wpaper:141

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Related research

Keywords: efficiency wages; endogenous growth; market power; research and development;

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References

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  1. Kreps,David M. & Wallis,Kenneth F. (ed.), 1997. "Advances in Economics and Econometrics: Theory and Applications," Cambridge Books, Cambridge University Press, number 9780521589819, December.
  2. Philippe Aghion & Peter Howitt, 1998. "Market Structure and the Growth Process," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 1(1), pages 276-305, January.
  3. Alberto BUCCI, 2000. "On Scale Effects, Market Power and Growth when Human and Technological Capital are Complements," Working Papers 134, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
  4. Blundell, Richard & Griffith, Rachel & Van Reenen, John, 1995. "Dynamic Count Data Models of Technological Innovation," Economic Journal, Royal Economic Society, vol. 105(429), pages 333-44, March.
  5. Aghion, Philippe & Harris, Christopher & Vickers, John, 1997. "Competition and growth with step-by-step innovation: An example," European Economic Review, Elsevier, vol. 41(3-5), pages 771-782, April.
  6. Paul M Romer, 1999. "Endogenous Technological Change," Levine's Working Paper Archive 2135, David K. Levine.
  7. C Bean & Christopher A. Pissarides, 1992. "Unemployment, Consumption and Growth," CEP Discussion Papers dp0100, Centre for Economic Performance, LSE.
  8. Dixit, Avinash K & Stiglitz, Joseph E, 1975. "Monopolistic Competition and Optimum Product Diversity," The Warwick Economics Research Paper Series (TWERPS) 64, University of Warwick, Department of Economics.
  9. Kreps,David M. & Wallis,Kenneth F. (ed.), 1997. "Advances in Economics and Econometrics: Theory and Applications," Cambridge Books, Cambridge University Press, number 9780521589833, December.
  10. Aghion, Ph. & Dewatripont, M. & Rey, P., 1997. "Corporate governance, competition policy and industrial policy," European Economic Review, Elsevier, vol. 41(3-5), pages 797-805, April.
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  14. Boeri, Tito & Nicoletti, Giuseppe & Scarpetta, Stefano, 2000. "Regulation And Labour Market Performance," CEPR Discussion Papers 2420, C.E.P.R. Discussion Papers.
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  17. Bénassy, Jean-Pascal, 1996. "Is there always too little research in endogenous growth with expanding product variety ?," CEPREMAP Working Papers (Couverture Orange) 9615, CEPREMAP.
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  20. Fabio FIORILLO & Stefano STAFFOLANI, 2000. "To redistribute or not? Unemployment benefit, workfare and citizen's income in a dual labour market," Working Papers 128, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
  21. Caballero, R.J. & Hammour, M.L., 1997. "Jobless Growth: Appropriability, Factor-Substitution, and Unemployment," Working papers 97-18, Massachusetts Institute of Technology (MIT), Department of Economics.
  22. Peter Gottschalk & Timothy M. Smeeding, 1997. "Cross-National Comparisons of Earnings and Income Inequality," Journal of Economic Literature, American Economic Association, vol. 35(2), pages 633-687, June.
  23. Eriksson, Clas, 1997. "Is There a Trade-Off between Employment and Growth?," Oxford Economic Papers, Oxford University Press, vol. 49(1), pages 77-88, January.
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  26. Bucci, Alberto, 1998. "Market Power and Growth in a Schumpeterian Framework of Innovation," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 1998024, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
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  29. Aghion, Philippe & Howitt, Peter, 1996. " Research and Development in the Growth Process," Journal of Economic Growth, Springer, vol. 1(1), pages 49-73, March.
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Citations

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Cited by:
  1. Elvio MATTIOLI, 2003. "The measurement of coherence in the evaluation of criteria and its effects or ranking problems illustrated using a multicriteria decision method," Working Papers 199, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
  2. Stefania BUSSOLETTI & Roberto ESPOSTI, 2004. "Regional Convergence, Structural Funds and the Role of Agricolture in the EU. A Panel-Data Approach," Working Papers 220, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
  3. Marcello MESSORI & Alberto ZAZZARO, 2004. "Monetary profits within the circuit: Ponzi finance oer "mors tua, vita mea"?," Working Papers 200, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
  4. Renato BALDUCCI & Stefano STAFFOLANI, 2003. "Short-Run Bargaining, Factors Shares and Growth," Working Papers 188, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
  5. Nicola MATTEUCCI & Alessandro STERLACCHINI, 2003. "ICT and Employment Growth in Italian Industries," Working Papers 193, Universita' Politecnica delle Marche (I), Dipartimento di Scienze Economiche e Sociali.
  6. Ugo Fratesi, 2003. "Innovation Diffusion and the Evolution of Regional Disparities," ERSA conference papers ersa03p327, European Regional Science Association.

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