Competition in the portuguese economy: Estimated price-cost margins under imperfect labour markets

Ana Cristina Soares () and João Amador ()

Working Papers from Banco de Portugal, Economics and Research Department

Abstract: This article estimates price-cost margins for the Portuguese markets in a context of imperfect competition in the labour market. The database used includes virtually the universe of Portuguese firms for the period 2005-2009. The results strongly reject the hypothesis of perfect competition in both labour and product markets. Estimated price-cost margins are very heterogeneous across markets and the average for the overall economy ranges between 25 and 28 per cent, depending on the variables used to weight each market. In addition, the tradable sector presents a lower price-cost margin than the non-tradable sector. According to the methodology used, workers’ bargaining power in the ortuguese economy is approximately 13 per cent, without a clear istinction between tradable and non-tradable sectors. Finally, workers’ bargaining power is highly and positively correlated with price-cost margins across markets.

JEL-codes: L10 L60 O50 (search for similar items in EconPapers)
Date: 2013
New Economics Papers: this item is included in nep-ind
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Citations: View citations in EconPapers (11)

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Related works:
Working Paper: Competition in the Portuguese economy: estimated price-cost margins under imperfect labour markets (2014)
Journal Article: Competition in the Portuguese Economy: Estimated Price-Cost Margins Under Imperfect Labour Markets (2013)
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Persistent link: https://EconPapers.repec.org/RePEc:ptu:wpaper:w201308

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