Globalisation, concentration and footloose firms: in search of the main cause of the declining labour share

Damiaan Persyn and John Hutchinson

LICOS Discussion Papers from LICOS - Centre for Institutions and Economic Performance, KU Leuven

Abstract: Over the last two decades the share of national income which accrues to labour has followed a marked downward trend across a host of industrialised countries. This paper attempts to assess the importance of several potential causes of this phenomenon. We investigate compositional effects, the effect of declining trade costs, changes in the market structure (concentration) and the effect of low-wage competition between countries. Overall, the findings suggest that lower trade costs and factors related to economic integration such as industry concentration, the market power of firms and increased international low-wage competition indeed affect the labour share. However, their effect has been quite limited when compared to changes in the sectoral composition, the effects of technological change, cyclical factors and changes in the prices of intermediary goods.

Keywords: factor shares; globalisation (search for similar items in EconPapers)
JEL-codes: E25 J30 (search for similar items in EconPapers)
Date: 2009
New Economics Papers: this item is included in nep-bec and nep-int
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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http://www.econ.kuleuven.be/licos/publications/dp/dp229.pdf

Related works:
Journal Article: Globalisation, concentration and footloose firms: in search of the main cause of the declining labour share (2012)
Working Paper: Globalisation, concentration and footloose firms: in search of the main cause of the declining labour share (2011)
Working Paper: Globalisation, concentration and footloose firms: in search of the main cause of the declining labour share (2011)
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Persistent link: https://EconPapers.repec.org/RePEc:lic:licosd:22909

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