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Imports as product and labour market discipline

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Author Info
H. BOULHOL
S. DOBBELAERE ()
S. MAIOLI

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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 Ghent University, Faculty of Economics and Business Administration in its series Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium with number 07/479.

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Length: 38 pages
Date of creation: Aug 2007
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Handle: RePEc:rug:rugwps:07/479

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

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Find related papers by JEL classification:
C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data
F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects
L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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Full references

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. Torben M. Andersen & Allan Sørensen, 2007. "Product Market Integration and Labour Markets: Aggregate Gains at the Cost of More Inequality?," IZA Discussion Papers 2556, Institute for the Study of Labor (IZA). [Downloadable!]
  2. Danny Leung, 2008. "Markups in Canada: Have They Changed and Why?," Working Papers 08-7, Bank of Canada. [Downloadable!]
  3. Sabien Dobbelaere & Jacques Mairesse, 2007. "Panel data estimates of the production function and product and labor market imperfections," Working Paper Series 782, European Central Bank. [Downloadable!]
    Other versions:
  4. Hervé Boulhol, 2006. "Do capital market and trade liberalization trigger labor market deregulation ?," Cahiers de la Maison des Sciences Economiques bla06062, Université Panthéon-Sorbonne (Paris 1). [Downloadable!]
    Other versions:
  5. Filip Abraham & Jozef Konings & Stijn Vanormelingen, 2009. "The effect of globalization on union bargaining and price-cost margins of firms," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 145(1), pages 13-36, April. [Downloadable!] (restricted)
    Other versions:
  6. Persyn, Damiaan, 2008. "Trade as a Wage Disciplining Device," IZA Discussion Papers 3786, Institute for the Study of Labor (IZA). [Downloadable!]
    Other versions:
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