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Joint Estimation of Price-Cost Margins and Union Bargaining Power for Belgian Manufacturing Author info | Abstract | Publisher info | Download info | Related research | Statistics Dobbelaere, Sabien () (SHERPPA, Ghent University, LICOS Centre for Transition Economics, K.U. Leuven and IZA Bonn)
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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 para meters. 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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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 2005Date of revision:
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Keywords: efficient bargaining ; bargaining power ; market power ; price -cost margins ; Other versions of this item:
Find related papers by JEL classification: C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data D21 - Microeconomics - - Production and Organizations - - - Firm Behavior J50 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - General L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
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