The effect of globalization on union bargaining and price-cost margins of firms

Filip Abraham; Jozef Konings; Stijn Vanormelingen

doi:10.1007/s10290-009-0003-8

The effect of globalization on union bargaining and price-cost margins of firms

Filip Abraham, Jozef Konings, Stijn Vanormelingen

Economics Department

Research output: Contribution to journal › Article › peer-review

43 Citations (Scopus)

Abstract

In recent years, Europe has witnessed an accelerated process of economic integration. This paper analyzes how increased economic integration has affected labor and product markets. We use a panel of Belgian manufacturing firms to estimate price-cost margins and union bargaining power and show how various measures of globalization affect them. Import competition puts pressure on both markups and union bargaining power, especially when there is increased competition from low wage countries. This suggests that increased globalization is associated with a moderation of wage claims in unionized countries, which should be associated with positive effects on employment.

Original language	English
Pages (from-to)	13-36
Number of pages	24
Journal	Review of World Economics
Volume	145
Issue number	1
DOIs	https://doi.org/10.1007/s10290-009-0003-8
Publication status	Published - Apr 2009

Keywords

International trade
Markups
Trade unions

ASJC Scopus subject areas

Economics, Econometrics and Finance(all)

Access to Document

10.1007/s10290-009-0003-8

Fingerprint Dive into the research topics of 'The effect of globalization on union bargaining and price-cost margins of firms'. Together they form a unique fingerprint.

Cite this

@article{d4820b34fb28468585f9459ef4adf371,

title = "The effect of globalization on union bargaining and price-cost margins of firms",

abstract = "In recent years, Europe has witnessed an accelerated process of economic integration. This paper analyzes how increased economic integration has affected labor and product markets. We use a panel of Belgian manufacturing firms to estimate price-cost margins and union bargaining power and show how various measures of globalization affect them. Import competition puts pressure on both markups and union bargaining power, especially when there is increased competition from low wage countries. This suggests that increased globalization is associated with a moderation of wage claims in unionized countries, which should be associated with positive effects on employment.",

keywords = "International trade, Markups, Trade unions",

author = "Filip Abraham and Jozef Konings and Stijn Vanormelingen",

note = "Funding Information: Acknowledgment We would like to thank Italo Colantone, Jan De Loecker, Sabien Dobbelaere, James Hartigan, Jacques Mairesse, Damiaan Persyn, Raf Wouters and researchers of the National Bank of Belgium for helpful comments and suggestions. The research was financed by a grant of the National Bank of Belgium. This paper has benefited from presentations at the National Bank of Belgium, ETSG conference 2006, EARIE conference 2006, LICOS ITD seminar series and the doctoral workshop at Universit{\'e}Catholique de Louvain-la-Neuve.",

year = "2009",

month = apr,

doi = "10.1007/s10290-009-0003-8",

language = "English",

volume = "145",

pages = "13--36",

journal = "Review of World Economics",

issn = "1610-2878",

publisher = "Springer Verlag",

number = "1",

}

TY - JOUR

T1 - The effect of globalization on union bargaining and price-cost margins of firms

AU - Abraham, Filip

AU - Konings, Jozef

AU - Vanormelingen, Stijn

N1 - Funding Information: Acknowledgment We would like to thank Italo Colantone, Jan De Loecker, Sabien Dobbelaere, James Hartigan, Jacques Mairesse, Damiaan Persyn, Raf Wouters and researchers of the National Bank of Belgium for helpful comments and suggestions. The research was financed by a grant of the National Bank of Belgium. This paper has benefited from presentations at the National Bank of Belgium, ETSG conference 2006, EARIE conference 2006, LICOS ITD seminar series and the doctoral workshop at UniversitéCatholique de Louvain-la-Neuve.

PY - 2009/4

Y1 - 2009/4

N2 - In recent years, Europe has witnessed an accelerated process of economic integration. This paper analyzes how increased economic integration has affected labor and product markets. We use a panel of Belgian manufacturing firms to estimate price-cost margins and union bargaining power and show how various measures of globalization affect them. Import competition puts pressure on both markups and union bargaining power, especially when there is increased competition from low wage countries. This suggests that increased globalization is associated with a moderation of wage claims in unionized countries, which should be associated with positive effects on employment.

AB - In recent years, Europe has witnessed an accelerated process of economic integration. This paper analyzes how increased economic integration has affected labor and product markets. We use a panel of Belgian manufacturing firms to estimate price-cost margins and union bargaining power and show how various measures of globalization affect them. Import competition puts pressure on both markups and union bargaining power, especially when there is increased competition from low wage countries. This suggests that increased globalization is associated with a moderation of wage claims in unionized countries, which should be associated with positive effects on employment.

KW - International trade

KW - Markups

KW - Trade unions

UR - http://www.scopus.com/inward/record.url?scp=64849084360&partnerID=8YFLogxK

UR - http://www.scopus.com/inward/citedby.url?scp=64849084360&partnerID=8YFLogxK

U2 - 10.1007/s10290-009-0003-8

DO - 10.1007/s10290-009-0003-8

M3 - Article

AN - SCOPUS:64849084360

VL - 145

SP - 13

EP - 36

JO - Review of World Economics

JF - Review of World Economics

SN - 1610-2878

IS - 1

ER -