Trade, wages, and productivity

Arbeitspapier

We develop a new general equilibrium model of trade with heterogeneous firms, variable demand elasticities and endogenously determined wages. Trade integration favors wage convergence, intensifies competition, and forces the least efficient firms to leave the market, thereby affecting aggregate productivity. Since wage and productivity responses are endogenous, our model is well suited to study the impacts of trade integration on aggregate productivity and factor prices. Using Canada-U.S. interregional trade data, we first estimate a system of theory-based gravity equations under the general equilibrium constraints generated by the model. Doing so allows us to measure 'border effects' and to decompose them into a 'pure' border effect, relative and absolute wage effects, and a selection effect. Using the estimated parameter values, we then quantify the impacts of removing the Canada-U.S. border on wages, productivity, markups, the share of exporters, the mass of varieties produced and consumed, and welfare. We finally provide a similar quantification with respect to regional population changes.

Angaben zum Objekt

• Sprache: Englisch

Verweise und Beziehungen

• Erschienen in: Series: IZA Discussion Papers ; No. 3682

Klassifikation und Themen

• Klassifikation: Wirtschaft ; International Investment; Long-term Capital Movements
• Thema: Heterogeneous firms ; gravity equations ; general equilibrium ; monopolistic competition ; variable demand elasticities ; Handelsregionalismus ; Wirtschaftsintegration ; Grenzgebiet ; Lohn ; Produktivität ; Gravitationsmodell ; Allgemeines Gleichgewicht ; Monopolistischer Wettbewerb ; Kanada ; USA

Beteiligte, Orts- und Zeitangaben

• Ereignis: Geistige Schöpfung
• (wer): Behrens, Kristian ; Mion, Giordano ; Murata, Yasusada ; Südekum, Jens
• Ereignis: Veröffentlichung
• (wer): Institute for the Study of Labor (IZA)
• (wo): Bonn
• (wann): 2008

Weitere Informationen

• Handle: http://hdl.handle.net/10419/35285
• URN: urn:nbn:de:101:1-2008092963
• Letzte Aktualisierung: 10.03.2025, 11:42 MEZ