Arbeitspapier

Does Offshoring Shape Labor Market Imperfections? A Comparative Analysis of Belgian and Dutch Firms

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.

Language
Englisch

Bibliographic citation
Series: IZA Discussion Papers ; No. 15962

Classification
Wirtschaft
Empirical Studies of Trade
Trade and Labor Market Interactions
Monopsony; Segmented Labor Markets
Labor-Management Relations, Trade Unions, and Collective Bargaining: General
Subject
wage markdowns
wage markups
firm-level offshoring

Event
Geistige Schöpfung
(who)
Dobbelaere, Sabien
Fuss, Catherine
Vancauteren, Mark
Event
Veröffentlichung
(who)
Institute of Labor Economics (IZA)
(where)
Bonn
(when)
2023

Handle
Last update
10.03.2025, 11:42 AM CET

Data provider

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Object type

  • Arbeitspapier

Associated

  • Dobbelaere, Sabien
  • Fuss, Catherine
  • Vancauteren, Mark
  • Institute of Labor Economics (IZA)

Time of origin

  • 2023

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