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Economic Integration, Lobbying by Firms and Workers, and Technological Change

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  • Tapio Palokangas

Abstract

I examine a common market with the following institutions. Oligopolistic firms improve their productivity by R&D. Wages are determined by union-employer bargaining. Firms and workers lobby the authority that accepts new members and regulates unions' and firms' market power. The main findings are as follows. Small common markets have incentives to expand, but large ones are indifferent to new members. With product market deregulation, there is an upper limit for the size of the common market and the growth rate diminishes with integration.

Suggested Citation

  • Tapio Palokangas, 2008. "Economic Integration, Lobbying by Firms and Workers, and Technological Change," DEGIT Conference Papers c013_003, DEGIT, Dynamics, Economic Growth, and International Trade.
    • Handle: RePEc:deg:conpap:c013_003
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    References listed on IDEAS

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    More about this item

    Keywords

    economic integration; labor unions; market power; endogenous technological change;
    All these keywords.

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • J50 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - General
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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