Labour unions and multi-product firms in closed and open economies

TY - JOUR

T1 - Labour unions and multi-product firms in closed and open economies

AU - Egger, Hartmut

AU - Koch, Michael

PY - 2012/11

Y1 - 2012/11

N2 - This paper sets up a general oligopolistic equilibrium model with multi-product firms and union wage setting. In this model, we conduct two policy experiments. First, we show that deunionization induces a general decline in firm scale and scope, the respective reduction being more pronounced in non-unionized industries. Second, we study the consequences of trade liberalization, and show that access to foreign markets lowers firm scope in all industries as well as the scope differential between unionized and non-unionized firms. Adjustments in firm scale turn out to be less clear-cut and, inter alia, depend on the degree of product differentiation.

AB - This paper sets up a general oligopolistic equilibrium model with multi-product firms and union wage setting. In this model, we conduct two policy experiments. First, we show that deunionization induces a general decline in firm scale and scope, the respective reduction being more pronounced in non-unionized industries. Second, we study the consequences of trade liberalization, and show that access to foreign markets lowers firm scope in all industries as well as the scope differential between unionized and non-unionized firms. Adjustments in firm scale turn out to be less clear-cut and, inter alia, depend on the degree of product differentiation.

UR - http://www.scopus.com/inward/record.url?scp=84874705165&partnerID=8YFLogxK

U2 - 10.1111/j.1540-5982.2012.01745.x

DO - 10.1111/j.1540-5982.2012.01745.x

M3 - Journal article

AN - SCOPUS:84874705165

SN - 0008-4085

VL - 45

SP - 1456

EP - 1479

JO - Canadian Journal of Economics

JF - Canadian Journal of Economics

IS - 4

ER -