Trade union rights, democracy, and exports: A gravity model approach

Abstract

The paper uses a gravity trade model to evaluate the effects of trade union rights and democracy on exports for the 1993 to 1999 period for four classifications of manufacturing industries by labor-intensity. The model includes data for 162 countries and used eight indicators of trade union rights and democracy, including those constructed by the authors. The paper finds robust relationships between stronger trade union rights and higher total manufacturing exports and between stronger democracy and higher total exports, total manufacturing exports, and labor-intensive manufacturing exports. The paper finds that the relationship between trade union rights and labor-intensive manufacturing exports is highly sensitive to the classification of labor-intensive manufacturing industries and to model specification, yielding statistically significant results of opposite sign depending on assumptions. © 2006 The Authors; Journal compilation © 2006 Blackwell Publishing Ltd.