Imports as Product and Labor Market Discipline

27 Pages Posted: 24 Jul 2006

See all articles by Herve Boulhol

Herve Boulhol

Université Paris I Panthéon-Sorbonne - IXIS-CIB

Sabien Dobbelaere

Vrije Universiteit Amsterdam - Department of Economics; Tinbergen Institute; IZA Institute of Labor Economics

Sara Maioli

Newcastle University Business School

Date Written: June 2006

Abstract

This paper tests the pro-competitive effect of trade in the product and labor 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.

Keywords: workers' bargaining power, mark-ups, pro-competitive effect

JEL Classification: C23, F16, J51, L13

Suggested Citation

Boulhol, Herve and Dobbelaere, Sabien and Maioli, Sara, Imports as Product and Labor Market Discipline (June 2006). IZA Discussion Paper No. 2178. Available at SSRN: https://ssrn.com/abstract=918722

Herve Boulhol

Université Paris I Panthéon-Sorbonne - IXIS-CIB ( email )

12, place du Panthéon
Paris, IL
France

Sabien Dobbelaere (Contact Author)

Vrije Universiteit Amsterdam - Department of Economics ( email )

De Boelelaan 1105
NL- Amsterdam, NL-1081 HV
Netherlands
0031 20 598 28 74 (Phone)

Tinbergen Institute

Keizersgracht 482
NL- Amsterdam, NL-1017 EG
Netherlands

IZA Institute of Labor Economics

P.O. Box 7240
D- Bonn, 53072
Germany

Sara Maioli

Newcastle University Business School ( email )

5, Barrack road
Newcastle upon Tyne, NE1 4SE
United Kingdom
+44 (0) 191 2081665 (Phone)

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