Competition, cost structure, and labour leverage : evidence from the U.S. airline industry / Konstantin Wagner
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Discovery
1738248399
URN
urn:nbn:de:gbv:3:2-127919
DOI
ISBN
ISSN
Autorin / Autor
Beiträger
Körperschaft
Erschienen
Halle (Saale), Germany : Halle Institute for Economic Research (IWH) - Member of the Leibniz Association, [09. November 2020]
Umfang
1 Online-Ressource (III, 47 Seiten, 2,51 MB) : Illustrationen
Ausgabevermerk
Sprache
eng
Anmerkungen
Inhaltliche Zusammenfassung
I study the effect of increasing competition on financial performance through labour leverage. To capture competition, I exploit variation in product market contestability in the U.S. airline industry. First, I find that increasing competitive pressure leads to increasing labour leverage, proxied by labour share. This explains the decrease in operating profitability through labour rigidities. Second, by exploiting variation in human capital specificity, I show that contestability of product markets induces labour market contestability. Whereas affected firms might experience more stress through higher wages or loss of skilled human capital, more mobile employee groups benefit from competitions through higher labour shares.
Schriftenreihe
IWH-Diskussionspapiere ; 2020, no. 21 (November 2020) ppn:837399270