Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/30060
Authors: 
Braun, Sebastian
Year of Publication: 
2009
Series/Report no.: 
Kiel Working Paper 1566
Abstract: 
The effects of unions on productivity and firm performance have been the topic of extensive research. Existing studies have, however, primarily focused on firm-level bargaining and on markets that are characterised by a small and fixed number of identical firms. This paper studies how different unionisation structures affect firm productivity and firm performance in a monopolistic competition model with heterogeneous firms and free entry. While centralised bargaining induces tougher selection among heterogeneous producers and thus increases average productivity, firm-level bargaining allows less productive entrants to remain in the market. Centralised bargaining also results in higher average output and profit levels than either decentralised bargaining or a competitive labour market. From the perspective of consumers, the choice between centralised and decentralised bargaining involves a potential trade-off between product variety and product prices.
Subjects: 
Trade unions
heterogeneous firms
productivity
firm performance
JEL: 
J24
J50
D43
Document Type: 
Working Paper

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