The Impact of New Free Trade Agreements on Incumbent Firms and Workers

Arbeitspapier

Trade policies might affect firms' market power and their ability to reap product-market mark-ups. Thus, potentially they influence not only firms' economic performance, but also worker pay. Utilising panel-data on Norwegian Manufacturing exporters from 2005-18 and multi-product production function-estimation techniques and recent development within the literature on dynamic treatment effects in event studies with heterogeneous treatment effects, we show that free-trade agreements increase exports and return-on-assets for Norwegian incumbent exporters, but their mark-ups decline. On average, workers in these established firms benefit from free-trade agreements, but this depends on occupations, union strength and labour market tightness.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: IZA Discussion Papers ; No. 16649

Classification and Topics

• Classification: Wirtschaft ; Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity ; Empirical Studies of Trade ; Production, Pricing, and Market Structure; Size Distribution of Firms ; Wage Level and Structure; Wage Differentials ; Monopsony; Segmented Labor Markets
• Subject: free-trade agreements ; price-cost markups ; profits ; wages ; multiproduct-function-estimation ; dynamic treatment effects

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Dale-Olsen, Harald
• Event: Veröffentlichung
• (who): Institute of Labor Economics (IZA)
• (where): Bonn
• (when): 2023

Further information

• Handle: http://hdl.handle.net/10419/282776
• Last update: 10.03.2025, 11:41 AM CET