Changing institutions in the European market: the impact on mark-ups and rents allocation
AbstractWe investigate whether the completion of the Single Market Programme has enhanced competition on the product markets across European countries, taking into account the companion structural reforms undertaken by the member countries, particularly in the labour market and the institutional setting of important industries (i.e. network industries). We test for a break in both mark-ups and the division of rent between capital and labour based on a statistical model incorporating efficient bargaining in the labour market. Using industry data for ten EU countries we find that, without controlling for changes in the rent sharing, mark-up estimates tend to increase in the 1990s. However, once we assume efficient bargaining in the labour market, mark-ups remain virtually unchanged or, in some sectors or groups of countries, even decrease; this reflects the declining shares of rents accruing to workers as a result of their diminished bargaining power. The evidence is particularly strong for high and medium-tech manufacturing, for construction and for those activities that went through deep institutional changes and privatization programmes.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by Bank of Italy, Economic Research and International Relations Area in its series Temi di discussione (Economic working papers) with number 781.
Date of creation: Dec 2010
Date of revision:
institutional changes; mark-up; rent-sharing;
Other versions of this item:
- Antonio Bassanetti & Roberto Torrini & Francesco Zollino, . "Changing Institutions in the European Market: the Impact on Mark-ups and Rents Allocation," Working Papers 11, Department of the Treasury, Ministry of the Economy and of Finance.
- D40 - Microeconomics - - Market Structure and Pricing - - - General
- J50 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - General
- L50 - Industrial Organization - - Regulation and Industrial Policy - - - General
This paper has been announced in the following NEP Reports:
- NEP-ALL-2011-01-03 (All new papers)
- NEP-EEC-2011-01-03 (European Economics)
- NEP-EUR-2011-01-03 (Microeconomic European Issues)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Ghazala Azmat & Alan Manning & John Van Reenen, 2007.
"Privatization, Entry Regulation and the Decline of Labor's Share of GDP: A Cross-Country Analysis of the Network Industries,"
CEP Discussion Papers
dp0806, Centre for Economic Performance, LSE.
- Ghazala Azmat & Alan Manning & John Van Reenen, 2007. "Privatization, entry regulation and the decline of labor's share of GDP: a cross-country analysis of the network industries," LSE Research Online Documents on Economics 4552, London School of Economics and Political Science, LSE Library.
- Azmat, Ghazala & Manning, Alan & Van Reenen, John, 2007. "Privatization, Entry Regulation and the Decline of Labour's Share of GDP: A Cross-Country Analysis of the Network Industries," CEPR Discussion Papers 6348, C.E.P.R. Discussion Papers.
- Joaquim Oliveira Martins & Stefano Scarpetta & Dirk Pilat, 1996. "Mark-Up Ratios in Manufacturing Industries: Estimates for 14 OECD Countries," OECD Economics Department Working Papers 162, OECD Publishing.
- Badinger, Harald, 2007. "Has the EU’s Single Market Programme Fostered Competition? Testing for a Decrese in Markup Rations in EU Industries," Working Papers 135, Oesterreichische Nationalbank (Austrian Central Bank).
- Ian Dew-Becker & Robert J. Gordon, 2008.
"The Role of Labor Market Changes in the Slowdown of European Productivity Growth,"
NBER Working Papers
13840, National Bureau of Economic Research, Inc.
- Dew-Becker, Ian & Gordon, Robert J, 2008. "The Role of Labour Market Changes in the Slowdown of European Productivity Growth," CEPR Discussion Papers 6722, C.E.P.R. Discussion Papers.
- Dobbelaere, Sabien & Mairesse, Jacques, 2007.
"Panel data estimates of the production function and product and labor market imperfections,"
Working Paper Series
0782, European Central Bank.
- Sabien Dobbelaere & Jacques Mairesse, 2013. "Panel data estimates of the production function and product and labor market imperfections," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 28(1), pages 1-46, 01.
- Sabien Dobbelaere & Jacques Mairesse, 2009. "Panel Data Estimates of the Production Function and Product and Labor Market Imperfections," Tinbergen Institute Discussion Papers 09-001/3, Tinbergen Institute.
- S. Dobbelaere & J. Mairesse, 2009. "Panel data estimates of the production function and product and labor market imperfections," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 09/586, Ghent University, Faculty of Economics and Business Administration.
- Sabien Dobbelaere & Jacques Mairesse, 2008. "Panel Data Estimates Of The Production Function And Product And Labor Market Imperfections," NBER Working Papers 13975, National Bureau of Economic Research, Inc.
- Dobbelaere, Sabien & Mairesse, Jacques, 2010. "Panel Data Estimates of the Production Function and Product and Labor Market Imperfections," IZA Discussion Papers 5176, Institute for the Study of Labor (IZA).
- Rachel Griffith & Rupert Harrison & Helen Simpson, 2010.
"Product Market Reform and Innovation in the EU,"
Scandinavian Journal of Economics,
Wiley Blackwell, vol. 112(2), pages 389-415, 06.
- Griffith, Rachel & Harrison, Rupert & Simpson, Helen, 2006. "Product Market Reform and Innovation in the EU," CEPR Discussion Papers 5849, C.E.P.R. Discussion Papers.
- Rachel Griffith & Rupert Harrison & Helen Simpson, 2006. "Product market reform and innovation in the EU," IFS Working Papers W06/17, Institute for Fiscal Studies.
- Damien J. Neven & Lars-Hendrik Röller & Zhentang Zhang, 2002. "Endogenous Costs and Price-Cost Margins," Discussion Papers of DIW Berlin 294, DIW Berlin, German Institute for Economic Research.
- Andrea Bassanini & Romain Duval, 2006. "The Determinants of Unemployment across OECD Countries," Post-Print halshs-00120584, HAL.
- João Amador & Ana Cristina Soares, 2013.
"Competition in the portuguese economy: Estimated price-cost margins under imperfect labour markets,"
w201308, Banco de Portugal, Economics and Research Department.
- João Amador & Ana Cristina Soares, 2013. "Competition in the Portuguese economy: Estimated price-cost margins under imperfect labour markets," Economic Bulletin and Financial Stability Report Articles, Banco de Portugal, Economics and Research Department.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().
If references are entirely missing, you can add them using this form.