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The effects of changes in a firm's product market power on wages

By J. Vainiomaki and S. Wadhwani


Using firm-level panel data, this paper argues that increases in a firm''s market share or a rise in the industry concentration ratio both serve to increase wages. On these estimates, actual changes in the ''product market power'' variables could have generated a wage gap of up to 13.5 per cent over the period 1976-82. These results are consistent with various rent-sharing hypotheses, although these is some evidence that the extent of rent-sharing is greater in union firms

Topics: HD Industries. Land use. Labor
Publisher: Centre for Economic Performance, London School of Economics and Political Science
Year: 1991
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Provided by: LSE Research Online
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