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Collective bargaining and monopsony: the regulation of noncompete agreements in France

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  • Boeri, Tito
  • Crescioli, Tommaso
  • Garnero, Andrea
  • Luisetto, Lorenzo G.

Abstract

Can collective bargaining mitigate monopsony power? This paper studies the extent to which collective agreements regulating employee noncompete clauses affect firm-level markdowns in French manufacturing. Using a staggered difference-in-differences design, we find that such regulation reduces markdowns by 1.3%–2.2% on average. The effects increase over time and are stronger among smaller, less productive, low-wage firms. Leveraging a French Court of Cassation ruling requiring financial compensation for enforceable noncompetes, we show complementarity between national regulations and sectoral bargaining. By strengthening compliance and adding limitations, collective bargaining emerges as an effective regulatory tool shaping firms' use of noncompete agreements.

Suggested Citation

  • Boeri, Tito & Crescioli, Tommaso & Garnero, Andrea & Luisetto, Lorenzo G., 2026. "Collective bargaining and monopsony: the regulation of noncompete agreements in France," LSE Research Online Documents on Economics 140384, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:140384
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    Keywords

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    JEL classification:

    • J42 - Labor and Demographic Economics - - Particular Labor Markets - - - Monopsony; Segmented Labor Markets
    • J51 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Trade Unions: Objectives, Structure, and Effects
    • J53 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Labor-Management Relations; Industrial Jurisprudence
    • J58 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - Public Policy
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials

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