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The effect of competition on wages and productivity: Evidence from the United Kingdom

Symeonidis, G (2008) 'The effect of competition on wages and productivity: Evidence from the United Kingdom.' Review of Economics and Statistics, 90 (1). 134 - 146. ISSN 0034-6535

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Abstract

I examine the impact of competition on wages and productivity using a panel data set of U.K. manufacturing industries over 1954-1973. The introduction of cartel law in the United Kingdom in the late 1950s caused an intensification of price competition in previously cartelized manufacturing industries, but it did not affect those industries that were not cartelized. The econometric results from a comparison of the two groups of industries before and after the introduction of cartel law provide strong evidence of a negative effect of collusion on labor productivity growth. There is no evidence of any effect of collusion on wages. These results are robust to controlling for the potential endogeneity of collusion and are further strengthened by a comparison with U.S. data. © 2008 by the President and Fellows of Harvard College and the Massachusetts Institute of Technology.

Item Type: Article
Subjects: H Social Sciences > HB Economic Theory
Divisions: Faculty of Social Sciences > Economics, Department of
Depositing User: Jim Jamieson
Date Deposited: 16 Aug 2012 10:27
Last Modified: 30 Jan 2019 16:16
URI: http://repository.essex.ac.uk/id/eprint/3684

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