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Labour unions and multi-product firms in closed and open economies


  • Hartmut Egger
  • Michael Koch


This paper sets up a general oligopolistic equilibrium model with multi-product firms and union wage setting. In this model, we conduct two policy experiments. First, we show that deunionization induces a general decline in firm scale and scope, the respective reduction being more pronounced in non-unionized industries. Second, we study the consequences of trade liberalization, and show that access to foreign markets lowers firm scope in all industries as well as the scope differential between unionized and non-unionized firms. Adjustments in firm scale turn out to be less clear-cut and, inter alia, depend on the degree of product differentiation.

Suggested Citation

  • Hartmut Egger & Michael Koch, 2012. "Labour unions and multi-product firms in closed and open economies," Canadian Journal of Economics, Canadian Economics Association, vol. 45(4), pages 1456-1479, November.
  • Handle: RePEc:cje:issued:v:45:y:2012:i:4:p:1456-1479

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    Cited by:

    1. Rudy Colacicco, 2015. "Ten Years Of General Oligopolistic Equilibrium: A Survey," Journal of Economic Surveys, Wiley Blackwell, vol. 29(5), pages 965-992, December.
    2. Irlacher, Michael & Baumgarten, Daniel & Koch, Michael, 2017. "Short- versus long-run effects of offshoring when sectors are heterogeneous," Annual Conference 2017 (Vienna): Alternative Structures for Money and Banking 168272, Verein für Socialpolitik / German Economic Association.

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    JEL classification:

    • F1 - International Economics - - Trade
    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance


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