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Markups, bargaining power and offshoring: An empirical assessment

Author

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  • Lourdes Moreno

    (Universidad Complutense de Madrid and GRIPICO)

  • Diego Rodríguez

    (Universidad Complutense de Madrid and GRIPICO)

Abstract

This paper tests the pro-competitive effect of imports on product and labour markets for Spanish manufacturing firms in the period 1990-2005. In doing so, it takes into account the type of imported products: final vs intermediate. Markups are estimated following the procedure suggested by Roeger (1995) and including an efficient bargaining model. The observed heterogeneity among firms is parameterized to consider additional product standardization and market concentration. The results support the Imports as Market Discipline hypothesis for importers of final goods, while firms that offshore intermediate inputs show similar markups to non-importers. Additionally, the union bargaining power is smaller the more final-goods oriented imports are and the more homogeneous is the type of goods elaborated by firms.

Suggested Citation

  • Lourdes Moreno & Diego Rodríguez, 2010. "Markups, bargaining power and offshoring: An empirical assessment," Working Papers 10-05, Asociación Española de Economía y Finanzas Internacionales.
  • Handle: RePEc:aee:wpaper:1005
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    Cited by:

    1. repec:spr:empeco:v:53:y:2017:i:2:d:10.1007_s00181-016-1143-z is not listed on IDEAS
    2. Marco de Pinto & Jochen Michaelis, 2017. "Firm Selection and the Role of Union Heterogeneity," IAAEU Discussion Papers 201710, Institute of Labour Law and Industrial Relations in the European Union (IAAEU).
    3. Leahy, Dermot & Montagna, Catia, 2012. "Strategic investment and international outsourcing in unionised oligopoly," Labour Economics, Elsevier, pages 260-269.
    4. Fanti, Luciano & Buccella, Domenico, 2017. "When unionisation is profitable for firms in network industries," Economics Discussion Papers 2017-9, Kiel Institute for the World Economy (IfW).
    5. João Amador & Ana Cristina Soares, 2013. "Competition in the Portuguese economy: Estimated price-cost margins under imperfect labour markets," Economic Bulletin and Financial Stability Report Articles, Banco de Portugal, Economics and Research Department.
    6. M. Dumont & G. Rayp & P. Willemé, 2010. ""Ménage à trois" in a globalizing world: bargaining between firms, low-skilled and high-skilled workers," Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium 10/687, Ghent University, Faculty of Economics and Business Administration.
    7. Dumont, Michel & Rayp, Glenn & Willemé, Peter, 2012. "The bargaining position of low-skilled and high-skilled workers in a globalising world," Labour Economics, Elsevier, vol. 19(3), pages 312-319.
    8. Corchón, Luis C. & Moreno, L., 2010. "Interpreting markups in Spanish manufacturing: The exponential model," MPRA Paper 26609, University Library of Munich, Germany.
    9. Cristina Fernández & Aitor Lacuesta & José Manuel Montero & Alberto Urtasun, 2015. "Heterogeneity of markups at the firm level and changes during the great recession: the case of spain," Working Papers 1536, Banco de España;Working Papers Homepage.
    10. Domenico Buccella, 2011. "Labor unions and economic integration: A review," Económica, Departamento de Economía, Facultad de Ciencias Económicas, Universidad Nacional de La Plata, pages 25-89.

    More about this item

    Keywords

    Markups; Offshoring; Bargaining power.;

    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets

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