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Oligopoly, open shop unions and trade liberalisation

  • Paulo Bastos
  • Udo Kreickemeier
  • Peter Wright

In an international oligopoly model, we investigate how trade liberalisation impacts on collective bargaining outcomes when workers are represented by open shop unions. We find that, with intermediate levels of union density, trade liberalisation may lead to higher negotiated wages even if no trade occurs in equilibrium. In addition, we show that union wages may be higher with free trade than in autarky.

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File URL: http://www.nottingham.ac.uk/gep/documents/papers/2007/07-30.pdf
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Paper provided by University of Nottingham, GEP in its series Discussion Papers with number 07/30.

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Handle: RePEc:not:notgep:07/30
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  1. Naylor, Robin & Raaum, Oddbjorn, 1993. "The Open Shop Union, Wages, and Management Opposition," Oxford Economic Papers, Oxford University Press, vol. 45(4), pages 589-604, October.
  2. Huizinga, H.P., 1993. "International market integration and union wage bargaining," Other publications TiSEM 567712dd-8f03-40d8-8428-c, Tilburg University, School of Economics and Management.
  3. Barth, Erling & Raaum, Oddbjorn & Naylor, Robin, 2000. "Union Wage Effects: Does Membership Matter?," Manchester School, University of Manchester, vol. 68(3), pages 259-75, June.
  4. Lommerud, Kjell Erik & Meland, Frode & Sørgard, Lars, 2001. "Unionized Oligopoly, Trade Liberalization and Location Choice," CEPR Discussion Papers 2990, C.E.P.R. Discussion Papers.
  5. Naylor, Robin, 1998. "International trade and economic integration when labour markets are generally unionised," European Economic Review, Elsevier, vol. 42(7), pages 1251-1267, July.
  6. Lommerud, Kjell Erik & Meland, Frode & Straume, Odd Rune, 2003. "Globalisation and union opposition to technological change
    [Globalisierung und gewerkschaftlicher Widerstand gegen technologischen Wandel]
    ," Discussion Papers, Research Unit: Market Processes and Governance SP II 2003-18, Social Science Research Center Berlin (WZB).
  7. James Brander, 1980. "Intra-Industry Trade in Identical Commodities," Working Papers 380, Queen's University, Department of Economics.
  8. repec:ese:iserwp:2001-09 is not listed on IDEAS
  9. Naylor, Robin & Cripps, Martin, 1993. "An economic theory of the open shop trade union," European Economic Review, Elsevier, vol. 37(8), pages 1599-1620, December.
  10. Naylor, Robin, 1999. "Union Wage Strategies and International Trade," Economic Journal, Royal Economic Society, vol. 109(452), pages 102-25, January.
  11. Straume, Odd Rune, 2003. "International mergers and trade liberalisation: implications for unionised labour," International Journal of Industrial Organization, Elsevier, vol. 21(5), pages 717-735, May.
  12. Booth, Alison L & Bryan, Mark L, 2001. "The Union Membership Wage Premium Puzzle: Is There A Free-Rider Problem?," CEPR Discussion Papers 2879, C.E.P.R. Discussion Papers.
  13. Mezzetti, C. & Dinopoulos, E., 1989. "Domestic Unionization And Import Competition," Papers 337, California Davis - Institute of Governmental Affairs.
  14. Brander, James A. & Spencer, Barbara J., 1988. "Unionized oligopoly and international trade policy," Journal of International Economics, Elsevier, vol. 24(3-4), pages 217-234, May.
  15. Cynthia L. Gramm & John F. Schnell, 1994. "Some Empirical Effects Of Using Permanent Striker Replacements," Contemporary Economic Policy, Western Economic Association International, vol. 12(3), pages 122-133, 07.
  16. Munch, Jakob Roland & Skaksen, Jan Rose, 2002. " Product Market Integration and Wages in Unionized Countries," Scandinavian Journal of Economics, Wiley Blackwell, vol. 104(2), pages 289-99, June.
  17. Corneo, Giacomo, 1995. "Social custom, management opposition, and trade union membership," European Economic Review, Elsevier, vol. 39(2), pages 275-292, February.
  18. Gunderson, Morley & Melino, Angelo, 1987. "Estimating Strike Effects in a General Model of Prices and Quantities," Journal of Labor Economics, University of Chicago Press, vol. 5(1), pages 1-19, January.
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