Economic Integration and Firm-Union Interaction: The Role of Market Structure

Fung, K. C.; Huizinga, Harry

doi:1999.14.4.554

The Journal of Economic Integration 1999 December;14(4) :554-571.
DOI: https://doi.org/10.11130/jei.1999.14.4.554

Economic Integration and Firm-Union Interaction: The Role of Market Structure

K. C. Fung, Harry Huizinga,

University of California, Santa Cruz
Tilburg University

ABSTRACT

This paper examines the impact of market integration in the presence of a labor union. Effects on wages, employment, product price, firm profits, and union rents are analyzed. Both the theoretical model as well as numerical simulations show the importance of factors such as the product demand elasticity, the number of firms, the degree of product differentiation, and the nature of competition in the goods market. One surprising result is that union wages and union rents can increase in the presence of market integration. (JEL Classifications: F10, F12, F15)

Keywords: economic integration | labor markets | wages

REFERENCE

1.	Huizinga, H. [1988], "Union Wage Bargaining and Industry Structure , " mimeo, Stanford University.

2.	Fung, K. C. and H. Huizinga [1997], "Can Freer Intra-Industry Trade Raise Wages: Evidence From Canada," mimeo, University of California , Santa Cruz.