IDEAS home Printed from https://ideas.repec.org/a/taf/jitecd/v21y2012i2p271-286.html
   My bibliography  Save this article

Factor market monopsony and international duopoly

Author

Listed:
  • Naoto Jinji

Abstract

In this article, I investigate the effects of monopsony power in the factor market when the output market is internationally duopolistic. Two firms (North and South) compete in the Northern market. The Southern firm has monopsony power in the labor market, while the Northern firm does not. I show that the Northern firm actually benefits from the Southern firm's exercise of monopsony power in the labor market. Northern consumers, however, suffer from it. Imposing labor standards results in conferral of a strategic advantage on the Southern firm, whereas it may improve Northern welfare.

Suggested Citation

  • Naoto Jinji, 2012. "Factor market monopsony and international duopoly," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 21(2), pages 271-286, February.
    • Handle: RePEc:taf:jitecd:v:21:y:2012:i:2:p:271-286
    DOI: 10.1080/09638191003731278
    as

    Download full text from publisher

    File URL: http://hdl.handle.net/10.1080/09638191003731278
    Download Restriction: Access to full text is restricted to subscribers.
    File URL: https://libkey.io/10.1080/09638191003731278?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Stephen Devadoss & Wongun Song, 2006. "Oligopsony Distortions and Welfare Implications of Trade," Review of International Economics, Wiley Blackwell, vol. 14(3), pages 452-465, August.
    2. Stephen Devadoss & Wongun Song, 2003. "Oligopsonistic Intermediate Input and Patterns of Trade," International Economic Journal, Taylor & Francis Journals, vol. 17(3), pages 77-97.
    3. Jonathan Eaton & Gene M. Grossman, 1986. "Optimal Trade and Industrial Policy Under Oligopoly," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 101(2), pages 383-406.
    4. Will Martin & Keith E. Maskus, 2001. "Core Labor Standards and Competitiveness: Implications for Global Trade Policy," Review of International Economics, Wiley Blackwell, vol. 9(2), pages 317-328, May.
    5. Cordella, Tito & Grilo, Isabel, 2001. "Social dumping and relocation: is there a case for imposing a social clause?," Regional Science and Urban Economics, Elsevier, vol. 31(6), pages 643-668, November.
    6. Catherine J. Morrison Paul, 2001. "Cost Economies And Market Power: The Case Of The U.S. Meat Packing Industry," The Review of Economics and Statistics, MIT Press, vol. 83(3), pages 531-540, August.
    7. Stephen Devadoss & Wongun Song, 2003. "Factor Market Oligopsony and the Production Possibility Frontier," Review of International Economics, Wiley Blackwell, vol. 11(4), pages 729-744, September.
    8. repec:bla:jindec:v:45:y:1997:i:4:p:377-86 is not listed on IDEAS
    9. Alan Manning, 2006. "A Generalised Model of Monopsony," Economic Journal, Royal Economic Society, vol. 116(508), pages 84-100, January.
    10. Richard T. Rogers & Richard J. Sexton, 1994. "Assessing the Importance of Oligopsony Power in Agricultural Markets," American Journal of Agricultural Economics, Agricultural and Applied Economics Association, vol. 76(5), pages 1143-1150.
    11. McCulloch, Rachel & Yellen, Janet L., 1980. "Factor market monopsony and the allocation of resources," Journal of International Economics, Elsevier, vol. 10(2), pages 237-247, May.
    12. Alireza Naghavi, 2007. "Asymmetric Labor Markets, Southern Wages and the Location of Firms," Review of Development Economics, Wiley Blackwell, vol. 11(3), pages 463-481, August.
    13. Feenstra, Robert C., 1980. "Monopsony distortions in an open economy: A theoretical analysis," Journal of International Economics, Elsevier, vol. 10(2), pages 213-235, May.
    14. Bardhan, Pranab K, 1979. "Wages and Unemployment in a Poor Agrarian Economy: A Theoretical and Empirical Analysis," Journal of Political Economy, University of Chicago Press, vol. 87(3), pages 479-500, June.
    15. William M. Boal, 1995. "Testing for Employer Monopsony in Turn-of-the-Century Coal Mining," RAND Journal of Economics, The RAND Corporation, vol. 26(3), pages 519-536, Autumn.
    16. Schroeter, John R, 1988. "Estimating the Degree of Market Power in the Beef Packing Industry," The Review of Economics and Statistics, MIT Press, vol. 70(1), pages 158-162, February.
    17. Brander, James A. & Spencer, Barbara J., 1985. "Export subsidies and international market share rivalry," Journal of International Economics, Elsevier, vol. 18(1-2), pages 83-100, February.
    18. Devadoss, Stephen & Song, Wongun, 2006. "Oligopsony Distortions and Welfare Implications of Trade," 2006 Annual meeting, July 23-26, Long Beach, CA 21043, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    19. James R. Markusen & Arthur J. Robson, 1980. "Simple General Equilibrium and Trade with a Monopsonized Sector," Canadian Journal of Economics, Canadian Economics Association, vol. 13(4), pages 668-682, November.
    20. repec:bla:reviec:v:9:y:2001:i:2:p:317-28 is not listed on IDEAS
    21. Maskus, Keith E., 1997. "Should core labor standards be imposed through international trade policy?," Policy Research Working Paper Series 1817, The World Bank.
    22. Alan Manning & Ted To, 2002. "Oligopsony and Monopsonistic Competition in Labor Markets," Journal of Economic Perspectives, American Economic Association, vol. 16(2), pages 155-174, Spring.
    23. Devadoss, Stephen, 2007. "Market power in input purchase and trade," International Review of Economics & Finance, Elsevier, vol. 16(4), pages 478-487.
    24. Azzeddine M. Azzam, 1997. "Measuring Market Power and Cost‐efficiency Effects of Industrial Concentration," Journal of Industrial Economics, Wiley Blackwell, vol. 45(4), pages 377-386, December.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Zhiqi Chen & Afshan Dar‐Brodeur, 2020. "Trade and labour standards: Will there be a race to the bottom?," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 53(3), pages 916-948, August.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Swati Dhingra, 2016. "Piggy-Back Exporting, Intermediation, and the Distributional Gains from Trade in Agricultural Markets," 2016 Meeting Papers 712, Society for Economic Dynamics.
    2. Devadoss, Stephen, 2007. "Market power in input purchase and trade," International Review of Economics & Finance, Elsevier, vol. 16(4), pages 478-487.
    3. Dhingra, Swati & Tenreyro, Silvana, 2021. "The Rise of Agribusinesses and its Distributional Consequences," CEPR Discussion Papers 15942, C.E.P.R. Discussion Papers.
    4. Dhingra, Swati & Tenreyro, Silvana, 2020. "The Rise of Agribusiness and the Distributional Consequences of Policies on Intermediated Trade," CEPR Discussion Papers 14384, C.E.P.R. Discussion Papers.
    5. Luca Macedoni & Vladimir Tyazhelnikov, 2024. "Oligopoly and oligopsony in international trade," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 57(2), pages 401-429, May.
    6. Ronchi, Loraine, 2006. "Fairtrade and market failures in agricultural commodity markets," Policy Research Working Paper Series 4011, The World Bank.
    7. James A. Brander & Barbara J. Spencer, 1986. "International Oligopoly and Asymmetric Labour Market Institutions," NBER Working Papers 2038, National Bureau of Economic Research, Inc.
    8. Sabien Dobbelaere & Jacques Mairesse, 2013. "Panel data estimates of the production function and product and labor market imperfections," Journal of Applied Econometrics, John Wiley & Sons, Ltd., vol. 28(1), pages 1-46, January.
    9. Zhiqi Chen & Afshan Dar‐Brodeur, 2020. "Trade and labour standards: Will there be a race to the bottom?," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 53(3), pages 916-948, August.
    10. Stephen Devadoss & Wongun Song, 2003. "Oligopsonistic Intermediate Input and Patterns of Trade," International Economic Journal, Taylor & Francis Journals, vol. 17(3), pages 77-97.
    11. Catherine J. Morrison Paul, 2003. "Cost Economies: A Driving Force for Consolidation and Concentration?," Southern Economic Journal, John Wiley & Sons, vol. 70(1), pages 110-127, July.
    12. Jonathan Conning, 2002. "Latifundia Economics," Economics Working Paper Archive at Hunter College 02/1, Hunter College Department of Economics.
    13. Rotemberg, Julio J. & Saloner, Garth, 2000. "Competition and human capital accumulation: a theory of interregional specialization and trade," Regional Science and Urban Economics, Elsevier, vol. 30(4), pages 373-404, July.
    14. Lopez, Rigoberto A. & Azzam, Azzeddine M. & Liron-Espana, Carmen, 2001. "Market Power and/or Efficiency: An Application to U.S. Food Processing," Research Reports 25160, University of Connecticut, Food Marketing Policy Center.
    15. Coyle, Barry & Chambers, Robert G. & Schmitz, Andrew, 1986. "Economic Gains from Agricultural Trade: A Review and Bibliography," Miscellaneous Publications 319990, United States Department of Agriculture, Economic Research Service.
    16. Alireza Naghavi, 2007. "Asymmetric Labor Markets, Southern Wages and the Location of Firms," Review of Development Economics, Wiley Blackwell, vol. 11(3), pages 463-481, August.
    17. Alireza Naghavi, 2003. "Asymmetric labor markets and the location of firms: Are multinationals attracted to weak labor standards?," Working Papers 200323, School of Economics, University College Dublin.
    18. Panagiotou, Dimitrios, 2005. "Cointegration, Error Correction, And The Measurement Of Oligopsony Conduct In The U.S. Cattle Market," 2005 Annual meeting, July 24-27, Providence, RI 19201, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    19. Crespi, John M. & Xia, Tian & Jones, Rodney D., 2008. "Competition, Bargaining Power, and the Cattle Cycle," 2008 Annual Meeting, July 27-29, 2008, Orlando, Florida 6263, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association).
    20. Stephen F. Hamilton & David L. Sunding, 2021. "Joint Oligopsony‐Oligopoly Power in Food Processing Industries: Application to the us Broiler Industry," American Journal of Agricultural Economics, John Wiley & Sons, vol. 103(4), pages 1398-1413, August.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:taf:jitecd:v:21:y:2012:i:2:p:271-286. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Longhurst (email available below). General contact details of provider: http://www.tandfonline.com/RJTE20 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.