Review of World Economics

, Volume 145, Issue 1, pp 13–36

The effect of globalization on union bargaining and price-cost margins of firms

  • Filip Abraham
  • Jozef Konings
  • Stijn Vanormelingen
Original Paper

DOI: 10.1007/s10290-009-0003-8

Cite this article as:
Abraham, F., Konings, J. & Vanormelingen, S. Rev World Econ (2009) 145: 13. doi:10.1007/s10290-009-0003-8

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.

Keywords

Markups Trade unions International trade 

JEL Classification

F16 J50 L13 

Copyright information

© Kiel Institute 2009

Authors and Affiliations

  • Filip Abraham
    • 1
  • Jozef Konings
    • 2
  • Stijn Vanormelingen
    • 3
  1. 1.Faculty of Business and EconomicsUniversity of Leuven (KUL)LeuvenBelgium
  2. 2.Faculty of Business and Economics and LICOSUniversity of Leuven (KUL) and CEPRLondonUK
  3. 3.HU Brussel and LICOS, University of Leuven (KUL) BrusselBelgium