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Insider Power and Wage Determination in Bulgaria An Econometric Investigation

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Author Info
Sabien Dobbelaere

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Abstract

Using a unique 3-digit firm level data set of all medium and large sized manufacturing enterprises in Bulgaria covering the years 1997/1998, we investigate how wage determination is related to ownership status. Building on a slightly modified version of the Right-To-Manage Model, our pooled OLS, panel and first-differences TSLS estimates show statistically significant differences in the share of rents taken by workers employed in state, private domestic and foreign firms. Taking account of firm heterogeneity, we find that rent sharing is nearly non-existent in foreign-owned firms while the level of pay is higher compared to state-owned companies. Further, rent sharing seems to be highly pronounced in state-owned enterprises while on average domestically private-owned companies are characterised by less rent sharing. Overall, our robustness checks confirm these findings.

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Publisher Info
Paper provided by LICOS - Centre for Institutions and Economic Performance, K.U.Leuven in its series LICOS Discussion Papers with number 11101.

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Length: 31 pages
Date of creation: 2001
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Handle: RePEc:lic:licosd:11101

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Related research
Keywords: Bulgarian Labour Market; Enterprise Behaviour; Insider Effects; Panel Data;

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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
J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General
P31 - Economic Systems - - Socialist Institutions and Their Transitions - - - Socialist Enterprises and Their Transitions

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  3. Christofides, Louis N & Oswald, Andrew J, 1992. "Real Wage Determination and Rent-Sharing in Collective Bargaining Agreements," The Quarterly Journal of Economics, MIT Press, vol. 107(3), pages 985-1002, August. [Downloadable!] (restricted)
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Cited by:
(explanations, 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.)

  1. Sabien Dobbelaere, 2002. "Joint Estimation of Mark-up and Bargaining Power Parameters for Belgian Manufacturing," LICOS Discussion Papers 12102, LICOS - Centre for Institutions and Economic Performance, K.U.Leuven. [Downloadable!]
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