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Imports as Product and Labour Market Discipline

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  • Herv� Boulhol

    (Universit� Paris-Panth�on Sorbonne, OECD)

  • Sabien Dobbelaere

    (VU University Amsterdam, Ghent University, IZA Bonn)

  • Sara Maioli

    (Newcastle University Business School)

Abstract

This paper tests the pro-competitive effect of trade in the product and labour markets of UK manufacturing sectors between 1988 and 2003 using a two-stage estimation procedure. In the first stage, we use data on 9820 firms from twenty manufacturing sectors to simultaneously estimate mark-up and workers’ bargaining power parameters according to sector, firm size and period. We find a significant drop in both the mark-up and the workers’ bargaining power in the mid-nineties. In the second stage, we relate our parameters of interest to trade variables. Our results show that imports from developed countries have significantly contributed to the decrease in both mark-ups and workers’ bargaining power.

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Paper provided by Tinbergen Institute in its series Tinbergen Institute Discussion Papers with number 09-002/3.

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Date of creation: 07 Jan 2009
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Handle: RePEc:dgr:uvatin:20090002

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Keywords: Workers’ bargaining power; mark-ups; pro-competitive effect;

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