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Intra-industry trade firm mobility and the union bargaining game

West, M. (1996) Intra-industry trade firm mobility and the union bargaining game. CEPDP (300). London School of Economics and Political Science. Centre for Economic Performance, London, UK.

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This paper considers the impact of economic integration on wages and employment in a second-best world where countries are identical in all respects. It is first shown that international trade increases the competitive pressures on firms and thus reduces price cost markups. As product market imperfections diminish, it is demonstrated that in the presence of unions, employment unambiguously rises whereas wages may either rise or fall. If firms are internationally mobile, the threat of firm mobility increases wage pressure, thereby reducing both wages and unemployment. Although net efficiency gains result, the distribution of these gains will be uneven.

Item Type: Monograph (Discussion Paper)
Official URL:
Additional Information: © 1996 M.West
Divisions: Centre for Economic Performance
Subjects: H Social Sciences > HF Commerce
H Social Sciences > HD Industries. Land use. Labor
Date Deposited: 12 Aug 2008 12:34
Last Modified: 16 May 2024 11:19

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