Union Wage Strategies and International Trade

Robin Naylor ()

Economic Journal, 1999, vol. 109, issue 452, 102-25

Abstract: The author characterizes a full set of possible international trade regimes for different combinations of wages in a two-country model of oligopoly with a homogeneous product. He shows that the nature of any equilibrium trade will be either interindustry (one-way) or intraindustry (two-way) depending on (endogenous) union choices between high- and low-wage strategies. The author shows that intraindustry trade is the more likely the lower are trade costs and that, under intraindustry trade, falling trade costs lead monopoly unions to set higher wages, but the opposite obtains under interindustry trade.

Date: 1999
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Persistent link: https://EconPapers.repec.org/RePEc:ecj:econjl:v:109:y:1999:i:452:p:102-25

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