The endogenous decisions of unionization and international trade: A general oligopolistic equilibrium model analysis

This paper presents a multi-sectoral general oligopolistic equilibrium trade model in which unionized and non-unionized sectors interact. In our model, the proportion of unionized sectors is endogenously determined. We show that this proportion depends on exogenous parameters such as productivity, population, number of firms, union costs and labor union formation. We also show that trade openness between symmetric countries raises the competitive wage and lowers the proportion of unionized sectors.