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Imports as Product and Labour Market Discipline

  • Hervé Boulhol
  • Sabien Dobbelaere
  • Sara Maioli

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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Article provided by London School of Economics in its journal British Journal of Industrial Relations.

Volume (Year): 49 (2011)
Issue (Month): 2 (06)
Pages: 331-361

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Handle: RePEc:bla:brjirl:v:49:y:2011:i:2:p:331-361
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