Wage bargaining, productivity growth and long-run industry structure Articles uri icon

publication date

  • December 2012

start page

  • 923

end page

  • 930


  • 6


  • 19

International Standard Serial Number (ISSN)

  • 0927-5371

Electronic International Standard Serial Number (EISSN)

  • 1879-1034


  • This paper studies the innovation dynamics of an oligopolistic industry. The firms compete not only in the output market but also by engaging in productivity enhancing innovations to reduce labor costs. Rent sharing may generate productivity dependent wage differentials. Productivity growth creates intertemporal spillover effects, which affect the incentives for innovation at subsequent dates. Over time the industry equilibrium approaches a steady state. The paper characterizes the evolution of the industry's innovation behavior and its market structure on the adjustment path.


  • innovation; labor productivity; oligopoly; wage differentials; productivity growth; industry dynamics