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International competition and rent sharing in French Manufacturing

Author

Listed:
  • Lionel Nesta

    (OFCE & Sciences Po Paris & Université Côte d'Azur, CNRS, GREDEG)

  • Stefano Schiavo

    (OFCE & Sciences Po Paris & University of Trento Department of Economics and Management)

Abstract

The paper investigates the impact of import competition on rent-sharing between firms and employees. First, by applying recent advances in the estimation of pricecosts margins to a large panel of French manufacturing firms for the period 1993–2007, we are able to classify each firm into labor- and product-market regimes based on the presence/absence of market power. Second, we concentrate on firms that operate in an efficient bargaining framework to study the effect of import penetration on workers’ bargaining power. We find that French imports from other OECD countries have a negative effect on bargaining power, whereas the impact of imports from low wage countries is more muted. By providing firm-level evidence on the relationship between international trade and rent sharing, the paper sheds new light on the effect of trade liberalization on the labor market

Suggested Citation

  • Lionel Nesta & Stefano Schiavo, 2018. "International competition and rent sharing in French Manufacturing," Documents de Travail de l'OFCE 2018-14, Observatoire Francais des Conjonctures Economiques (OFCE).
    • Handle: RePEc:fce:doctra:1814
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    File URL: http://www.ofce.sciences-po.fr/pdf/dtravail/WP2018-14.pdf
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    Cited by:

    1. Dobbelaere, Sabien & Mairesse, Jacques, 2018. "Comparing micro-evidence on rent sharing from two different econometric models," Labour Economics, Elsevier, vol. 52(C), pages 18-26.
    2. Mertens, Matthias, 2020. "Labor market power and the distorting effects of international trade," International Journal of Industrial Organization, Elsevier, vol. 68(C).
    3. repec:wsr:wpaper:y:2018:i:184 is not listed on IDEAS
    4. Kopel, Michael & Petrakis, Emmanuel & Ressi, Anna, 2019. "Endogenous scope of firm-union bargaining with vertical pay comparisons," Journal of Economic Behavior & Organization, Elsevier, vol. 167(C), pages 39-52.

    More about this item

    Keywords

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    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • J50 - Labor and Demographic Economics - - Labor-Management Relations, Trade Unions, and Collective Bargaining - - - General

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