Markups and bargaining power in tradable and non-tradable sectors

João Amador, Ana Cristina Soares

Research output: Contribution to journalArticle

4 Citations (Scopus)

Abstract

This article jointly estimates product and labour market imperfections for narrowly defined sectors in the Portuguese economy for the period 2006–2009, following Roeger (J Polit Econ 103(2):316–330, 1995), Crépon et al. (Ann Econ Stat (79/80):583–610, 2005), Dobbelaere (Int J Ind Organ 22(10):1381–1398, 2004) and Abraham et al. (Rev World Econ 145(1):13–36, 2009). In addition, we propose a criterion for the identification of tradable and non-tradable sectors based on the export-to-sales ratio and compare markups and workers’ bargaining power along this dimension. Our findings suggest that markups are higher in the non-tradable than in the tradable sector but workers’ bargaining power is similar. In addition, there is a significant level of heterogeneity across markets, particularly in the non-tradable sector. Moreover, the article confirms that, if labour market imperfections are disregarded, markups are significantly understated.

Original languageEnglish
Pages (from-to)669-694
Number of pages26
JournalEmpirical Economics
Volume53
Issue number2
DOIs
Publication statusPublished - Sep 2017

Keywords

  • Market competition
  • Nash bargaining
  • Portuguese economy

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