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Imports as Product and Labor Market Discipline

  • Boulhol, Hervé

    ()

    (OECD)

  • Dobbelaere, Sabien

    ()

    (VU University Amsterdam)

  • Maioli, Sara

    ()

    (Newcastle University)

This paper tests the pro-competitive effect of trade in the product and labor markets of UK manufacturing sectors between 1988 and 2003 using a two-stage estimation procedure. In the first stage, we use data on 9820 firms from twenty manufacturing sectors to simultaneously estimate mark-up and workers’ bargaining power parameters according to sector, firm size and period. We find a significant drop in both the mark-up and the workers’ bargaining power in the mid-nineties. In the second stage, we relate our parameters of interest to trade variables. Our results show that imports from developed countries have significantly contributed to the decrease in both mark-ups and workers’ bargaining power.

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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 2178.

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Length: 27 pages
Date of creation: Jun 2006
Date of revision:
Publication status: published in: British Journal of Industrial Relations, 2011, 49(2): 331-361
Handle: RePEc:iza:izadps:dp2178
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