Arbeitspapier
Capacity constraining labor market frictions in a global economy
Convex vacancy creation costs shape firms' responses to trade liberalization. They induce capacity constraints by increasing firms' cost of production, leading a profit maximizing firm not to fully meet the increased foreign demand. Hence, firms will only serve a few export markets. More productive firms will export to more countries and charge higher or similar prices compared to less productive firms. Trade liberalization also affects labor market outcomes. Increased profits by exporting firms triggers firm entry, reduces unemployment and increases wage dispersion in the on-the-job search model with monopolistic competition.
- Sprache
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Englisch
- Erschienen in
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Series: CESifo Working Paper ; No. 3597
Trade and Labor Market Interactions
Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
Unemployment: Models, Duration, Incidence, and Job Search
Production, Pricing, and Market Structure; Size Distribution of Firms
capacity constraints
international trade
heterogeneous firms
monopolistic competition
Larch, Mario
- Handle
- Letzte Aktualisierung
-
12.07.2024, 13:21 MESZ
Objekttyp
- Arbeitspapier
Beteiligte
- Holzner, Christian
- Larch, Mario
- Center for Economic Studies and ifo Institute (CESifo)
Entstanden
- 2011