The dynamics of industrial mark-ups in two small open economies: does national competition policy matter?

Konings, Jozef; Cayseele, Patrick Van; Warzynski, Frédèric

doi:10.1016/s0167-7187(00)00096-5

Cited by 99 publications

(60 citation statements)

References 17 publications

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“…The estimates of the average mark-up are in line with earlier work by Konings, Van Cayseele and Warzynski (2001) who report for Belgium an average mark-up of 1.28. These findings are also consistent with the results found by Dobbelaere (2004) and Crépon et al (2002), who estimate an average mark-up and bargaining power for Belgium and France of 1.49 and 1.42 respectively.…”

Section: Estimation Results For the Mark-up And Bargaining Powersupporting

confidence: 89%

The effect of globalization on union bargaining and price-cost margins of firms

2009

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Abstract:In recent years, Europe has witnessed an accelerated process of economic integration. Trade barriers were removed, the euro was introduced and ten new member states have joined the European Union. This paper analyzes how this process of increased economic integration has affected labor and product markets. To this end, we use a panel of Belgian manufacturing firms to estimate price-cost margins and union bargaining power and show how various measures of globalization affect them.Our findings can be summarized as follows: On average, firms set prices about 30% above marginal costs, but there is substantial variation across sectors, with the lowest mark-up around 19% and the highest around 52%. In addition, we find evidence that unions bargain over both wages and employment. We estimate an index of bargaining power, which reflects the fraction of profits that is passed on to workers into higher wages. Depending on the sector, this fraction varies between 6% and 18% and it increases with the markups of firms. Finally, we find that globalization puts pressure on both markups and union bargaining power, especially when there is increased competition from the low wage countries. This suggests that increased globalization is associated with a moderation of wage claims in unionized countries, which should be associated with positive effects on employment.

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Section: Estimation Results For the Mark-up And Bargaining Powersupporting

confidence: 89%

The effect of globalization on union bargaining and price-cost margins of firms

2009

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“…However, they use subjective measures of competition policy that are based on the perceptions of market participants, which, as a consequence, may not correctly represent the objective features of a competition policy regime. Konings, van Cayseele, and Warzynski (2001) and Kee and Hoekman (2007) look at the impact of the introduction of competition policy on industrial mark-ups, respectively, in Belgium and the Netherlands and in a large panel of industries in developed and developing countries. Neither of the two papers finds direct evidence of a positive effect of the introduction of competition policy or competition law on markups.…”

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confidence: 99%

Competition Policy and Productivity Growth: An Empirical Assessment

Buccirossi

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Duso

et al. 2013

The Review of Economics and Statistics

158

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Abstract-This paper estimates the impact of competition policy on total factor productivity growth for 22 industries in twelve OECD countries over 1995 to 2005. We find a positive and significant effect of competition policy as measured by created indexes. We provide results based on instrumental variables estimators and heterogeneous effects to support the causal nature of the established link. The effect is particularly strong for specific aspects of competition policy related to its institutional setup and antitrust activities. It is also strengthened by good legal systems, suggesting complementarities between competition policy and the efficiency of law enforcement institutions.

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“…However, he concludes that price-cost margins were significantly lower when the antitrust policy was tough. Furthermore, Konings et al 69 investigate the impact of competition policy on the level and the dynamics of firm price-cost margins in the Belgian and Dutch manufacturing industries. Belgium significantly strengthened their competition law in 1993, while the Netherlands followed a more lenient approach until the very end of the last century.…”

Section: Methods Applied In Academiamentioning

confidence: 99%