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Joint Estimation of Price-Cost Margins and Union Bargaining Power for Belgian Manufacturing

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  • Dobbelaere, Sabien

    ()
    (VU University Amsterdam)

Abstract

This paper extends Hall's (1988) methodology to analyse imperfections in both the product and the labour market for firms in the Belgian manufacturing industry over the period 1988-1995. We investigate the heterogeneity in price-cost mark-up and workers' bargaining power parameters among 18 sectors within the manufacturing industry as well as the relationship between both parameters. Using a sample of more than 7 000 firms, our GMM results indicate that ignoring imperfection in the labour market leads to an underestimation in the price-cost margin evaluated at perfect competition in the labour market. These findings are confirmed in the sectoral analysis. Sectors with higher workers' bargaining power typically show higher price-cost margins.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 1466.

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Length: 33 pages
Date of creation: Jan 2005
Date of revision:
Publication status: published as 'Estimation of price-cost margins and union bargaining power for Belgian manufacturing ' in: International Journal of Industrial Organization, 2004, 22 (10), 1381-1398
Handle: RePEc:iza:izadps:dp1466

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Keywords: efficient bargaining; bargaining power; market power; price-cost margins;

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Cited by:
  1. Fedderke, Johannes W. & Hill, Andrew J., 2011. "Industry structure and labor market flexibility in the South African manufacturing sector: A time series and panel data approach," Economic Modelling, Elsevier, vol. 28(3), pages 1291-1302, May.
  2. D. Van Den Poel, 2003. "Predicting Mail-Order Repeat Buying: Which Variables Matter?," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 03/191, Ghent University, Faculty of Economics and Business Administration.
  3. Dobbelaere, Sabien, 2004. "Estimation of price-cost margins and union bargaining power for Belgian manufacturing," International Journal of Industrial Organization, Elsevier, vol. 22(10), pages 1381-1398, December.
  4. José Miguel Benavente & José Luis Contreras, 2006. "Margen de Utilidad y Distribución de las Rentas: La industria manofacturera chilena durante los noventas," Working Papers wp219, University of Chile, Department of Economics.

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