Panel Data Estimates of the Production Function and Product and Labor Market Imperfections

Consistent with two models of imperfect competition in the labor market, the efficient bargaining model and the monopsony model, we provide two extensions of a microeconomic version of Hall's framework for estimating price-cost margins. We show that both product and labor market imperfections generate a wedge between factor elasticities in the production function and their corresponding shares in revenue that can be characterized by a "joint market imperfections parameter". Using an unbalanced panel of 10646 French firms in 38 manufacturing industries over the period 1978-2001, we can classify these industries into six different regimes depending on the type of competition in the product and the labor market. By far the most predominant regime is one of imperfect competition in the product market and efficient bargaining in the labor market (IC-EB), followed by a regime of imperfect competition in the product market and perfect competition or right-to-manage bargaining in the labor market (IC-PR), and by a regime of perfect competition in the product market and monopsony in the labor market (PC-MO). For each of these three predominant regimes, we assess within-regime firm differences in the estimated average price-cost mark-up and rent-sharing or labor supply elasticity parameters, following the Swamy methodology to determine the degree of true firm dispersion. As a way to assess the plausibility of our findings in the case of the dominant regime (IC-EB), we also relate our industry and firm-level estimates of price-cost mark-up and (relative) extent of rent sharing to industry characteristics and firm-specific variables respectively.rent sharing, monopsony, price-cost mark-ups, production function, panel data

Micro-Evidence on Rent Sharing from Different Perspectives

This article provides evidence of rent sharing from orthogonal directions by exploiting different dimensions in the same data. Taking advantage of a rich matched employer-employee dataset for France over the period 1984-2001, we consistently compare across-industry heterogeneity in rent-sharing parameters derived from three different approaches. The accounting approach and the standard labor economics approach are compatible with distinct labor bargaining settings (right-to-manage, efficient bargaining, labor hoarding) whereas the productivity approach hinges on the assumption of efficient bargaining. Across the different approaches, we evidently find differences in dispersion of the rent-sharing parameter estimates which could be attributable to differences in modeling assumptions and/or data requirements but these estimates lie within a comparable range. We interpret the latter finding as lending empirical support to efficient bargaining as the nature of the bargaining process in France over the considered period.rent sharing, wage equation, production function, matched employer-employee data

Collective Bargaining under Non-Binding Contracts

We introduce collective bargaining in a static framework where the firm and its risk-neutral employees negotiate over wages in a non-binding contract setting. Our main result is the equivalence between the non-binding collective equilibrium wage-employment contract and the equilibrium contract under binding risk-neutral efficient bargaining. We also demonstrate that our non-cooperative equilibrium wages and profits coincide with the Owen values of the corresponding cooperative game with the coalitional structure that follows from unionization.collective bargaining, union, firm, bargaining power, non-binding contract

Micro-evidence on Rent Sharing from Different Perspectives

This article provides evidence of rent sharing from orthogonal directions. Taking advantage of a rich matched employer-employee dataset for France, we compare consistently across-industry heterogeneity in rentsharing parameters relying on three different approaches: (i) the productivity approach, (ii) the accounting approach and (iii) the traditional labor economics approach. Focusing on economically meaningful parameter estimates shows that there exist differences in dispersion across the different approaches but more importantly that the rent-sharing estimates are within a comparable range.Rent sharing; wage equation; production function; matched employer-employee data

Panel data estimates of the production function and product and labor market imperfections

Embedding the efficient bargaining model into the Hall (1988) approach for estimating price-cost margins shows that both imperfections in the product and labor markets generate a wedge between factor elasticities in the production function and their corresponding shares in revenue. This article investigates these two sources of discrepancies both at the industry and the firm level using an unbalanced panel of 10646 French firms in 38 manufacturing industries over the period 1978-2001. By estimating standard production functions, we are able to derive estimates of average price-cost mark-up and rent sharing parameters. Our industry-level results indicate that industry differences in these parameters are quite sizeable. To determine the degree of true firm-level heterogeneity, we adopt the Swamy (1970) methodology. The Swamy robust estimates of true dispersion show sizeable within-industry firm heterogeneity. Firm size, capital intensity, distance to the industry technology frontier and investing in R&D seem to account for part of this heterogeneity. JEL Classification: C33, D21, J51, L13panel data, price-cost mark-ups, production function, Rent sharing

Properties and numerical solutions of dispersion curves in general isotropic waveguides

In this paper, some properties of dispersion curves in general isotropic piecewise homogeneous waveguides are rigorously derived. These properties are leveraged in a numerical implementation capable of determining the dispersion curves of such waveguides with cross-section materials that can be highly conductive (such as copper). In a numerical example, the influence of a lossy shielding conductor on the complex modes of a shielded dielectric image guide is investigated for the first time

Accurate 2D MoM technique for arbitrary dielectric, magnetic and conducting media applied to shielding problems

Calculating interaction integrals in a Method of Moments technique is highly challenging in a conductive medium. The specific form of its wave number leads to a strongly oscillating and exponentially damped Green's function, making standard numerical evaluation schemes inapt to accurately evaluate the interaction integrals. In this paper, we present an accurate 2D Method of Moments technique for arbitrary dielectric, magnetic and conducting media and apply the method to solve shielding problems

Accurate 2.5-D boundary element method for conductive media

The solution of the time-harmonic Maxwell equations using a boundary element method, for 2-D geometries illuminated by arbitrary 3-D excitations, gives rise to numerical difficulties if highly conductive media are present. In particular, the interaction integrals arising in the method of moments involve kernels that strongly oscillate in space and, at the same time, decay exponentially. We present an accurate method to tackle these issues over a very broad conductivity range (from lossy dielectric to conductor skin-effect regime), for both magnetic and nonmagnetic conductors. Important applications are the modal analysis of waveguides with nonperfect conductors, scattering problems, and shielding problems with enclosures with arbitrary permeability and conductivity and 3-D noise sources