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Monopoly Unions and Corporatism: Implications for Strategic Trade Policy

  • S. Bandyopadhyay
  • S. C. Bandyopadhyay

This paper analyzes the effects of corporatism on wage, employment, and optimal trade policy in the context of international market share rivalry. A Striking result of the paper is that when an optimal (Nash)subsidy is in place, wages, employment and the level of the optimal export subsidy itself become independent of the degree of corporatism. This result breaks down under free trade or when domestic policy makers endogenize the foreign wage, yielding in the familiar negative relationship between the degree of corporatism and wages. [F13, J51]

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Article provided by Taylor & Francis Journals in its journal International Economic Journal.

Volume (Year): 12 (1998)
Issue (Month): 4 ()
Pages: 1-22

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Handle: RePEc:taf:intecj:v:12:y:1998:i:4:p:1-22
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  1. Summers, Lawrence H & Gruber, Jonathan & Vergara, Rodrigo, 1993. "Taxation and the Structure of Labor Markets: The Case of Corporatism," The Quarterly Journal of Economics, MIT Press, vol. 108(2), pages 385-411, May.
  2. James A. Brander & Barbara J. Spencer, 1984. "Export Subsidies and International Market Share Rivalry," NBER Working Papers 1464, National Bureau of Economic Research, Inc.
  3. Mezzetti, Claudio & Dinopoulos, Elias, 1991. "Domestic unionization and import competition," Journal of International Economics, Elsevier, vol. 31(1-2), pages 79-100, August.
  4. Bandyopadhyay, Subhayu, 1997. "Demand elasticities, asymmetry and strategic trade policy," Journal of International Economics, Elsevier, vol. 42(1-2), pages 167-177, February.
  5. Oswald, Andrew J, 1985. " The Economic Theory of Trade Unions: An Introductory Survey," Scandinavian Journal of Economics, Wiley Blackwell, vol. 87(2), pages 160-93.
  6. Bulow, Jeremy I & Geanakoplos, John D & Klemperer, Paul D, 1985. "Multimarket Oligopoly: Strategic Substitutes and Complements," Journal of Political Economy, University of Chicago Press, vol. 93(3), pages 488-511, June.
  7. 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.
  8. 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 223-43, June.
  9. Driffill, John & van der Ploeg, Frederick, 1993. "Monopoly Unions and the Liberalisation of International Trade," Economic Journal, Royal Economic Society, vol. 103(417), pages 379-85, March.
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