Market Power, Dismissal Threat, and Rent Sharing: the Role of Insider and Outsider Forces in Wage Bargaining

Anabela Carneiro and Pedro Portugal ()

CEF.UP Working Papers from Universidade do Porto, Faculdade de Economia do Porto

Abstract: This study investigates wage determination at the firm level using a longitudinal panel of large firms in Portugal. The results revealed that insider forces such as revenue per employee and market share have a significant impact on wage determination. The results also showed that insider-outsider considerations seem to be empirically relevant in Portugal. That is, firms where insider workers seem to have more market power tend to pay higher wages. More specifically, in firms with low layoff rates, high proportion of permanent employees and high rates of labour utilization workers seem to be in a better position to extract rents in the form of higher wages.

Keywords: wages; market power; dismissal threat; rent sharing; instrumental variables (search for similar items in EconPapers)
JEL-codes: J30 J31 (search for similar items in EconPapers)
Pages: 23 pages
Date: 2004-08
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Citations: View citations in EconPapers (6)

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Related works:
Working Paper: Market Power, Dismissal Threat and Rent Sharing: The Role of Insider and Outsider Forces in Wage Bargaining (2006)
Working Paper: Market Power, Dismissal Threat and Rent Sharing: The Role of Insider and Outsider Forces in Wage Bargaining (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:por:cetedp:0403

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