Bargaining Power in the Portuguese Banking Sector

Abstract

With this paper we aim to explore the combined effect of privatisations and declining banking market concentration on the bargaining process between Portuguese banks and unions of bankers. Overall. although the change in ownership should be expected to generate a more shareholder revenue oriented management, and thus motivate a tougher negotiation stance by the banks. results indicate that it were the bankers and their unions who gained bargaining power during the deregulation period of 1991-94. In our view, such result is explained by the increased competitiveness that the changes in the banking market structure had on the market for skilled bankers. In other words, declining concentration not only increased the competitiveness in the market for banking products, but also in the market for this banking input.