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International Competition and Rent Sharing in French Manufacturing

Author

Listed:
  • Lionel Nesta

    (Université Côte d'Azur
    GREDEG CNRS
    OFCE Sciences Po. Paris
    SKEMA Business School)

  • Stefano Schiavo

    (University of Trento
    OFCE Sciences Po. Paris)

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 price-costs 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 dirms 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," GREDEG Working Papers 2018-11, Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), University of Nice Sophia Antipolis.
  • Handle: RePEc:gre:wpaper:2018-11
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    References listed on IDEAS

    as
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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.

    More about this item

    Keywords

    firm heterogeneity; import competition; mark-up; wage bargaining;

    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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