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

42 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)

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10.1007/s10290-009-0003-8

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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.",

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