Unionization and Strategic Trade Policy

March 1, 2000

Preview Citation

Format: Chicago

Phillip L Swagel, and Ling H Tan. Unionization and Strategic Trade Policy, (USA: International Monetary Fund, 2000) accessed December 3, 2024

Disclaimer: This Working Paper should not be reported as representing the views of the IMF.The views expressed in this Working Paper are those of the author(s) and do not necessarily represent those of the IMF or IMF policy. Working Papers describe research in progress by the author(s) and are published to elicit comments and to further debate

Summary

This paper examines the effect of unionization on welfare and trade policy in a model of duopolists competing in a third market. It shows that the traditional result that the presence of a union necessitates a stronger strategic trade policy to reach the optimal level of welfare depends on the mode of competition. With Bertrand duopolists, a union can be welfare-improving; it can also lead to a weaker trade policy, or even reverse the direction of the optimal policy. The results highlight the importance for trade policy of understanding the nature of firm behavior and the institutional features of the labor market.

Subject: Export subsidies, Labor, Trade policy, Wage setting, Wages

Keywords: Labor union, WP

Publication Details

Pages:

17
Volume:

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DOI:

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Issue:

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Series:

Working Paper No. 2000/053
Stock No:

WPIEA0532000
ISBN:

9781451847376
ISSN:

1018-5941

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