Joint Estimation of Price-Cost Margins and Union Bargaining Power for Belgian Manufacturing

Sabien Dobbelaere

Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium from Ghent University, Faculty of Economics and Business Administration

Abstract: This paper extends Hall’s (1988) methodology to analyse imperfections in both the product and the labour market for firms in the Belgian manufacturing industry over the period 1988-1995. We investigate the heterogeneity in price-cost mark-up and union bargaining power parameters among 18 sectors within the manufacturing industry as well as the relationship between both parameters. Using a sample of more than 7 000 firms, our GMM results indicate that ignoring imperfection in the labour market leads to an underestimation in the price-cost margin evaluated at perfect competition in the labour market. These findings are confirmed in the sectoral analysis. Sectors with higher worker bargaining power typically show higher price-cost margins.

Keywords: Efficient Bargaining; Union Bargaining Power; Market Power; Price-Cost Margins (search for similar items in EconPapers)
JEL-codes: C23 D21 J50 L13 (search for similar items in EconPapers)
Pages: 36 pages
Date: 2003-03
New Economics Papers: this item is included in nep-eec
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Citations: View citations in EconPapers (6)

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Related works:
Working Paper: Joint Estimation of Price-Cost Margins and Union Bargaining Power for Belgian Manufacturing (2005)
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Persistent link: https://EconPapers.repec.org/RePEc:rug:rugwps:03/171

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