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Journal of Economic Integration 2000 June;15(2) :280-293.
Product Market Integration and Wage Formation

Torben M. Andersen Jan Rose S rensen 

University of Aarhus
Copyright ©2000 Journal of Economic Integration
This paper analyses the basic labour market inter-dependencies among countries with intra-industrial trade and imperfectly competitive product and labour markets. The paper stresses two major channels through which increased integration may affect product markets and therefore in turn labour markets. First, market entry becomes easier and/or less costly implying that more goods become traded goods. Second, market integration among economies already open to trade may reduce the explicit or implicit trade costs of selling in foreign markets. It is found that the two channels have different implications for wage formation. (JEL Classifications: F12, F15, J31, J51)
Keywords: Trade Costs | Intra-industry Trade | Wage Formation
1. Huzinga, H. [1993], "International Market Integration and Union Wage Bargaining," Scandinavian Journal of Economics 95; pp. 249-55.
2. Oswald, A.J. [1985], "The Economic Theory of Trade Unions: An Introductory Survey," Scandinavian Journal of Economics 87; pp. 160-93.
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