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Research on the performance effects of bargaining remains inconclusive. One reason for this is neglect of heterogeneity of the bargainers, namely differences in exposure to world markets and their implications for international competitiveness. Since the effects of bargaining on competitiveness depend on coping with productivity differentials between the exposed and sheltered sector, we discuss how distinct bargaining structures interact with these differentials. Exposed-sector pattern setting is predicted to be the only bargaining structure that is sensitive to productivity differentials. The findings from time series cross-sectional analysis corroborate the expected impact on labour costs and the current balance, whereas no employment effects are discernible.

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Pattern bargaining stands out as both an under-researched and controversial subject. This article is an analytical and empirical contribution to this debate. Theoretically, it provides a conceptual framework, which enables analysis to systematically differentiate between distinct forms of pattern bargaining in terms of scope, agency, development and function, which arise from differing contexts in terms of interest configuration, power relations and economic conditions. This framework is used to develop testable hypotheses on pattern bargaining as a mechanism of inter-industry bargaining co-ordination. The empirical part of the article examines these hypotheses for collective bargaining from 1969 to 2004 in Austria, which is commonly seen as a paradigm case of pattern bargaining. The article concludes by highlighting the broader implications its findings have from a cross-nationally comparative perspective. Copyright (c) Blackwell Publishing Ltd/London School of Economics 2007.

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