Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/273817 
Year of Publication: 
2023
Series/Report no.: 
Tinbergen Institute Discussion Paper No. TI 2023-006/V
Publisher: 
Tinbergen Institute, Amsterdam and Rotterdam
Abstract: 
We study the relationship between offshoring and the prevalence and intensity of labor market imperfections at the firm level in Belgium and the Netherlands. Wage markup pricing stemming from workers' monopoly power is more prevalent than wage markdown pricing originating from firms' monopsony power in both countries. Offshoring benefits firms in that imports of final as well as intermediate goods are associated with a higher prevalence and intensity of wage markdowns. The widening effect of offshoring on wage markdowns arises from an increase in productivity that is only imperfectly passed through into an increase in wages. Offshoring is negatively related to the prevalence of wage markups. This also holds for the intensity of wage markups measured by workers' bargaining power in Belgium.
Subjects: 
Wage markdowns
wage markups
firm-level offshoring
JEL: 
F14
F16
J42
J50
Document Type: 
Working Paper

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