Has International Trade Affected Workers’ Bargaining Power?

Brock, Ellen; Dobbelaere, Sabien

doi:10.1007/s10290-006-0066-8

Cited by 53 publications

(60 citation statements)

References 45 publications

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“…To address this issue, we can adopt the solution suggested by Klette and Griliches (1996) which amounts to adding the growth in sector output as an additional regressor. 12 Because we include time dummies in our estimates run at the sector level, this effect is being controlled for. Table 2 reports the FE and GMM 13 estimates for each of the 20 sectors.…”

Section: Empirical Strategymentioning

confidence: 99%

“…Table 2 reports the FE and GMM 13 estimates for each of the 20 sectors. 14 For the GMM estimates, the parameters of interest (μ j and b φ j , j = 1, ..., 20) are computed from the two-step estimated values of the reduced-form coefficients 12 Theoretically, this solution relies on the assumption that the market power of firms originates from product differentiation. Intuitively, in the case of product differentiation, the demand for an individual firm's products is a function of its relative price within the sector.…”

Section: Empirical Strategymentioning

confidence: 99%

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Imports as Product and Labour Market Discipline

2009

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This paper tests the pro-competitive effect of trade in the product and labour 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.JEL classification : C23, F16, J51, L13.

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Section: Empirical Strategymentioning

confidence: 99%

Section: Empirical Strategymentioning

confidence: 99%

Imports as Product and Labour Market Discipline

2009

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“…For example, Abowd and Lemieux (1993); Gaston and Trefler (1995); Bratsberg and Ragan (2002) analyse how industry level imports or import competition affects unions. Brock and Dobbelaere (2006) ;Dumont, Rayp, and Willem (2006) use measures of imports, foreign direct investment activity and union bargaining power at the industry level in their analyses of the link between union bargaining power and globalization. Choi (2001) estimates industry level union wage premia, and relates these to the industry level stock of outward FDI.…”

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confidence: 99%

“…7 Brock and Dobbelaere (2006) and Dumont, Rayp, and Willem (2006) estimate bargaining power at the industry-year level, and relate these estimates of bargaining power to different measures of globalization at the industry level. The Nash bargaining framework conceptually makes a clear distinction between bargaining power and outside options.…”

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confidence: 99%

Rent Sharing with Footloose Production. Foreign Ownership and Wages Revisited.

Balsvik

Sæthre

2014

SSRN Journal

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We present a bargaining model of wage and employment determination, where we show that foreign acquisitions might hurt the bargaining outcome of powerful unions by giving the firm a credible threat to move production abroad. Using detailed data on firms and workers in manufacturing, including information on union membership and foreign ownership, we find, in line with the predictions of our model, that foreign acquisitions negatively impact the outcome of workers in highly unionized plants.

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“…In line with research for the US, several authors have found that international trade matters for the evolution of European employment and wages levels, f.e. Abraham and Konings (1999), Kramarz (2003) and Brock and Dobbelaere (2006). This research furthermore suggests that structural rigidities in European product and labor markets are a key factor in the transmission from global trade shocks to labor markets.…”

Section: Introductionmentioning

confidence: 94%

Price and Wage Setting in an Integrating Europe: Firm Level Evidence

2006

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Standard-Nutzungsbedingungen:Die Dokumente auf EconStor dürfen zu eigenen wissenschaftlichen Zwecken und zum Privatgebrauch gespeichert und kopiert werden.Sie dürfen die Dokumente nicht für öffentliche oder kommerzielle Zwecke vervielfältigen, öffentlich ausstellen, öffentlich zugänglich machen, vertreiben oder anderweitig nutzen.Sofern die Verfasser die Dokumente unter Open-Content-Lizenzen (insbesondere CC-Lizenzen) zur Verfügung gestellt haben sollten, gelten abweichend von diesen Nutzungsbedingungen die in der dort genannten Lizenz gewährten Nutzungsrechte. Terms of use: Documents in Statement of purpose:The purpose of these working papers is to promote the circulation of research results (Research Series) and analytical studies (Documents Series) made within the National Bank of Belgium or presented by external economists in seminars, conferences and conventions organised by the Bank. The aim is therefore to provide a platform for discussion. The opinions expressed are strictly those of the authors and do not necessarily reflect the views of the National Bank of Belgium. AbstractEurope has witnessed the last decade an accelerated process of economic integration. Trade barriers were removed, the euro was introduced and ten new member states entered the European Union. Economic integration is likely to have an impact on both labor and product markets. Unlike most other papers, that focus on product and labor markets separately, we look at the link between globalization and product and labor market imperfections simultaneously. To this end, we rely on a rich panel of manufacturing firms in Belgium, a small open economy. We find that union bargaining power is higher in sectors characterized by high price cost margins. Moreover, ignoring imperfections on the labor market, leads to an underestimation of product market power.Concerning the influence of globalization, our main findings are that both price cost margins and union bargaining power are typically lower in sectors that are subject higher international competition. This result is especially true for competition from low wage countries. JEL-code : F16, J50, L13.

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Has International Trade Affected Workers’ Bargaining Power?

Cited by 53 publications

References 45 publications

Imports as Product and Labour Market Discipline

Imports as Product and Labour Market Discipline

Rent Sharing with Footloose Production. Foreign Ownership and Wages Revisited.

Price and Wage Setting in an Integrating Europe: Firm Level Evidence

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