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

Author

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  • Hartmut Egger
  • Michael Koch

Abstract

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
    DOI: 10.1111/j.1540-5982.2012.01745.x
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    Cited by:

    1. Baumgarten, Daniel & Irlacher, Michael & Koch, Michael, 2020. "Offshoring and non-monotonic employment effects across industries in general equilibrium," European Economic Review, Elsevier, vol. 130(C).
    2. Rudy Colacicco, 2015. "Ten Years Of General Oligopolistic Equilibrium: A Survey," Journal of Economic Surveys, Wiley Blackwell, vol. 29(5), pages 965-992, December.
    3. Hosaki Sano, 2018. "Labor union and firm fs relocation: A general oligopolistic equilibrium model analysis," Discussion Papers in Economics and Business 18-15-Rev., Osaka University, Graduate School of Economics, revised May 2018.
    4. Wrona, Jens & Kreickemeier, Udo, 2016. "Industrialisation and the Big Push in a Global Economy," VfS Annual Conference 2016 (Augsburg): Demographic Change 145707, Verein für Socialpolitik / German Economic Association.
    5. Michael Irlacher, 2022. "Multi-product Firms in International Economics," Economics working papers 2022-01, Department of Economics, Johannes Kepler University Linz, Austria.
    6. Luca Macedoni & Rui Zhang & Frederic Warzynski, 2024. "Fight or Flight? How Do Firms Adapt Their Product Mix in Response to Demand and Competition," CESifo Working Paper Series 11144, CESifo.
    7. Irlacher, Michael & Baumgarten, Daniel & Koch, Michael, 2017. "Short- versus long-run effects of offshoring when sectors are heterogeneous," VfS Annual Conference 2017 (Vienna): Alternative Structures for Money and Banking 168272, Verein für Socialpolitik / German Economic Association.

    More about this item

    JEL classification:

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

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