Productivity, Price- and Wage-Markups: An Empirical Analysis of the Dutch Manufacturing Industry

Sara Amoroso, Bertrand Melenberg, Joseph Plasmans () and Mark Vancauteren

No 5273, CESifo Working Paper Series from CESifo

Abstract: This paper examines the interaction between productivity growth, firms’ monopolistic market power, and workers’ wage bargaining power. Our study contributes to several strands of literatures. First, we examine a monopolistic framework which accounts for wage bargaining. In addition to the other studies, along with the parameters characterizing a production function and the price-cost margins, we derive a measure of wage markup without relying on trade union participation data, and we study the correlation of the estimated parameters and markups with the firm-level productivity growth. Second, the paper contributes to literature on the structural identification of production functions in two ways. As a first step, it reviews the different estimation techniques that have been tackling the endogeneity issues concerning the simultaneity, the omitted output price, and the collinearity among input factors of production. Additionally, we propose an identification strategy that relies on the presence of imperfect competition in the flexible input market, namely, the labor market.

Keywords: price-cost margin; trade unions; identification; production functions; panel data (search for similar items in EconPapers)
JEL-codes: D22 D24 J51 L10 (search for similar items in EconPapers)
Date: 2015
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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