This paper analyzes the determinants of bargained wage differences at firm-level in Asturias. First, a theoretical model is described to identify these factors. The model is then estimated using a five-year panel that contains information about the firms in Asturias that have bargained their own collective agreement. This type of firm is chosen in order to determine the level of bargained wage rates provided in their collective agreements. Estimations show that aggregate wages, skill-mix and the public status of the firm are the main determinants of bargained wages. To set the average labour cost, which is a broader definition of the wage, the insider factors (sales per employee or productivity) are much more relevant. The estimated elasticity of wages with respect to sales per employee is greater than those estimated previously for the Spanish case, probably because of the special features of the current sample.

Keywords: collective bargaining, wage determination, trade unions.