Product Market Competition and Wage Formation

Project summary

We observe massive shifts of market shares towards large and internationally active firms, with important consequences for welfare. Project B06 studies whether firms of different sizes are faced with different challenges by globalization, such as a loss of worker identification or innovative pressure from competitors, and how their strategies to cope with these challenges affect the welfare gains from trade. The project investigates how changes in product market competition transmit into labor markets and how the behavior by firms of different sizes moderates this transmission.