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Has International Trade Affected Workers?Bargaining Power?

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  • Ellen Brock
  • Sabien Dobbelaere

Abstract

In this paper, we investigate whether international trade has affected workers?wages and their bargaining power in particular in the Belgian manufacturing industry over the period 1987-1995 by relying on a rent-sharing framework. Using a sample of more than 12 000 firms, we find that international trade has an effect on workers?wages through changes in the firms?profits. Our regression results reveal that increased foreign competition in the form of lower export prices reduces both wages per worker and profits per worker. Besides, our findings indicate that technological change is an important determinant of the workers?(relative) bargaining power. Globalisation seems also to play some role.

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Bibliographic Info

Paper provided by LICOS - Centre for Institutions and Economic Performance, KU Leuven in its series LICOS Discussion Papers with number 13603.

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Length: 43 pages
Date of creation: 2003
Date of revision:
Handle: RePEc:lic:licosd:13603

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Keywords: Rent Sharing; International Trade; Instrumental Variables; Panel Data;

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Citations

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Cited by:
  1. Dobbelaere, Sabien & Mairesse, Jacques, 2010. "Panel Data Estimates of the Production Function and Product and Labor Market Imperfections," IZA Discussion Papers 5176, Institute for the Study of Labor (IZA).
  2. Hervé Boulhol & Sabien Dobbelaere & Sara Maioli, 2011. "Imports as Product and Labour Market Discipline," British Journal of Industrial Relations, London School of Economics, vol. 49(2), pages 331-361, 06.
  3. Riedl, Maximilian, 2013. "Wage bargaining, job loss fears and offshoring," Center for European, Governance and Economic Development Research Discussion Papers 174, University of Goettingen, Department of Economics.
  4. Tovar, Patricia, 2011. "Lobbying costs and trade policy," Journal of International Economics, Elsevier, vol. 83(2), pages 126-136, March.
  5. Filip Abraham & Jozef Konings & Stijn Vanormelingen, 2007. "The Effect of Globalization on Union Bargaining and Price-Cost Margins of Firms," LICOS Discussion Papers 18107, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
  6. Anne Lauringson, 2010. "Measuring Union Bargaining Power In The Estonian Public Sector," University of Tartu - Faculty of Economics and Business Administration Working Paper Series 72, Faculty of Economics and Business Administration, University of Tartu (Estonia).
  7. Ranjan, Priya, 2013. "Offshoring, unemployment, and wages: The role of labor market institutions," Journal of International Economics, Elsevier, vol. 89(1), pages 172-186.
  8. Gabriele CARDULLO, 2009. "The Distributive and Welfare Effects of Product and Labour Market Deregulation," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2009007, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
  9. Jože P. Damijan & Luca Marcolin, 2013. "Global firms and wages: is there a rent sharing channel?," Working Papers 164, European Bank for Reconstruction and Development, Office of the Chief Economist.
  10. Dumont, Michel & Rayp, Glenn & Willemé, Peter, 2012. "The bargaining position of low-skilled and high-skilled workers in a globalising world," Labour Economics, Elsevier, vol. 19(3), pages 312-319.
  11. Domenico Buccella, 2011. "Labor unions and economic integration: A review," Económica, Departamento de Economía, Facultad de Ciencias Económicas, Universidad Nacional de La Plata, vol. 0, pages 25-89, January-D.
  12. Ahsan, Reshad N. & Mitra, Devashish, 2014. "Trade liberalization and labor's slice of the pie: Evidence from Indian firms," Journal of Development Economics, Elsevier, vol. 108(C), pages 1-16.

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