Unionization and International Market Share Rivalry: A Paradox

Review of International Economics, January 29, 1998

Posted: 27 Feb 1998

See all articles by Subhayu Bandyopadhyay

Subhayu Bandyopadhyay

Federal Reserve Bank of St. Louis - Research Division; IZA Institute of Labor Economics; West Virginia University

Sudeshna Champati Bandyopadhyay

West Virginia University

Abstract

Two exporting firms (domestic and foreign) are considered which are symmetric in all respects except that one is unionized while the other faces a competitive labor market. Under free trade the unionized firm has the lower market share. Paradoxically, in the policy equilibrium, the unionized firm has the larger market share. Consequently, the nation hosting the unionized firm has the higher welfare level.

JEL Classification: F12, F13, J51

Suggested Citation

Bandyopadhyay, Subhayu and Bandyopadhyay, Sudeshna Champati, Unionization and International Market Share Rivalry: A Paradox. Review of International Economics, January 29, 1998. Available at SSRN: https://ssrn.com/abstract=62835

Subhayu Bandyopadhyay (Contact Author)

Federal Reserve Bank of St. Louis - Research Division ( email )

411 Locust St
PO Box 442
St. Louis, MO 63011
United States

IZA Institute of Labor Economics

P.O. Box 7240
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Germany

West Virginia University ( email )

Morgantown, WV 26506-6025
United States
304-293-7879 (Phone)
304-293-7061 (Fax)

Sudeshna Champati Bandyopadhyay

West Virginia University ( email )

Morgantown, WV 26506-6025
United States

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