Unionisation structures, productivity and firm performance: New insights from a heterogeneous firm model

Sebastian Braun

    Research output: Contribution to journalArticlepeer-review

    14 Citations (Scopus)

    Abstract

    This paper introduces collective bargaining at the firm and at the sector level into the heterogeneous firm model of Melitz and Ottaviano (Melitz, M. J., Ottaviano, G. I. P., 2008. Market size, trade, and productivity. Review of Economic Studies 75 (1), 295-316). It then analyses how the two bargaining regimes change aggregate industry productivity and firm performance relative to a competitive labour market. While sector-level bargaining forces the least productive firms to exit and thus increases average productivity relative to the competitive benchmark, firm-level bargaining allows less productive firms to stay in the market and thus reduces average productivity. Sector-level bargaining also results in higher average output and profit levels than either firm-level bargaining or a competitive labour market. The paper also shows that the choice between sector- and firm-level bargaining can involve a trade-off between product variety and product prices: Not only the average price level but also product variety tends to be lower under sector-level bargaining than under firm-level bargaining.
    Original languageEnglish
    Pages (from-to)120-129
    Number of pages10
    JournalLabour Economics
    Volume18
    Issue number1
    DOIs
    Publication statusPublished - 1 Jan 2011

    Keywords

    • Trade unions Heterogeneous firms Productivity Firm performance

    Fingerprint

    Dive into the research topics of 'Unionisation structures, productivity and firm performance: New insights from a heterogeneous firm model'. Together they form a unique fingerprint.

    Cite this