Unionization and International Market Share Rivalry: A Paradox
Review of International Economics, January 29, 1998
Posted: 27 Feb 1998
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: Suggested Citation