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Profitable parallel trade in unionized markets

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Abstract

Why do producers often accept parallel trade in some markets such as automobiles, clothing, toys and consumer electronics? This paper points to a new factor, viz., the wage reducing effect of parallel trade in unionized markets, which may make parallel trading beneficial to a manufacturer. The benefit of parallel trade disappears in our analysis when such factor is removed.

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Correspondence to Arijit Mukherjee.

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Mukherjee, A., Zhao, L. Profitable parallel trade in unionized markets. J Econ 107, 267–276 (2012). https://doi.org/10.1007/s00712-012-0267-7

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  • DOI: https://doi.org/10.1007/s00712-012-0267-7

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