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Competitiveness and Integration of Product Markets

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  • Jakob Munch

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  • Jan Sørensen

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Abstract

This article develops a two-country, two-sector model with imperfect competition in one sector and asymmetric labor market structures in the sense that trade unions have wage bargaining power in one country whereas the labor market is competitive in the other country. We use a new approach to model product market integration, and it turns out that the unionized country gains from integration in terms of welfare, and, if the initial level of integration is relatively low, experiences an increase in employment and investment. Copyright Kluwer Academic Publishers 2000

Suggested Citation

  • Jakob Munch & Jan Sørensen, 2000. "Competitiveness and Integration of Product Markets," Open Economies Review, Springer, vol. 11(4), pages 359-381, October.
  • Handle: RePEc:kap:openec:v:11:y:2000:i:4:p:359-381
    DOI: 10.1023/A:1008374426687
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    File URL: http://hdl.handle.net/10.1023/A:1008374426687
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    References listed on IDEAS

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    1. Jan Sørensen, 1994. "Market integration and imperfect competition in labor and product markets," Open Economies Review, Springer, vol. 5(1), pages 115-130, March.
    2. Brander, James A. & Spencer, Barbara J., 1988. "Unionized oligopoly and international trade policy," Journal of International Economics, Elsevier, vol. 24(3-4), pages 217-234, May.
    3. Naylor, Robin, 1999. "Union Wage Strategies and International Trade," Economic Journal, Royal Economic Society, vol. 109(452), pages 102-125, January.
    4. Danthine, Jean-Pierre & Hunt, Jennifer, 1994. "Wage Bargaining Structure, Employment and Economic Integration," Economic Journal, Royal Economic Society, vol. 104(424), pages 528-541, May.
    5. Oswald, Andrew J, 1985. " The Economic Theory of Trade Unions: An Introductory Survey," Scandinavian Journal of Economics, Wiley Blackwell, vol. 87(2), pages 160-193.
    6. Mezzetti, Claudio & Dinopoulos, Elias, 1991. "Domestic unionization and import competition," Journal of International Economics, Elsevier, vol. 31(1-2), pages 79-100, August.
    7. Driffill, John & van der Ploeg, Frederick, 1993. "Monopoly Unions and the Liberalisation of International Trade," Economic Journal, Royal Economic Society, vol. 103(417), pages 379-385, March.
    8. Huizinga, Harry, 1993. " International Market Integration and Union Wage Bargaining," Scandinavian Journal of Economics, Wiley Blackwell, vol. 95(2), pages 249-255.
    9. Naylor, Robin, 1998. "International trade and economic integration when labour markets are generally unionised," European Economic Review, Elsevier, vol. 42(7), pages 1251-1267, July.
    10. Jan Rose SØRENSEN, 1993. "Integration of Product Markets when Labour Markets are Unionized," Discussion Papers (REL - Recherches Economiques de Louvain) 1993044, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    11. Driffill, John & van der Ploeg, Frederick, 1995. " Trade Liberalization with Imperfect Competition in Goods and Labour Markets," Scandinavian Journal of Economics, Wiley Blackwell, vol. 97(2), pages 223-243, June.
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    Cited by:

    1. 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.
    2. Ana MAULEON & Vincent J. VANNETELBOSCH, 2001. "Product Market Integration, Wage Bargaining and Strike Activity," Discussion Papers (IRES - Institut de Recherches Economiques et Sociales) 2001022, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).

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