Imperfect Product Competition and the Capital-Labor Ratio of an Unionized Firm: Some Theory and Evidence from Belgian Manufacturing Firms

Jacques Bughin

No 1993006, LIDAM Discussion Papers IRES from Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES)

Abstract: The paper develops a theory of the firm’s capital-labor ratio unionization of its labor force. Using explicit game theoretical solutions to union-firm bargaining, it is demonstrated how the firm’s product market power interacts with the inputs allocation rule in such a way that unionism represents a new channel by which the firm’s capital intensity is related to imperfect product competition. Some tests are conducted on a panel of Belgian manufacturing firms, which confirm both the effects of market power on the capital-labor ratio as well as the diversity of the union-firm bargaining locus at the industry level.

Keywords: competition; trade unions; enterprises (search for similar items in EconPapers)
Pages: 30
Date: 1993-01-01
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Persistent link: https://EconPapers.repec.org/RePEc:ctl:louvir:1993006

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