Journal article
Intraindustry trade and the skill premium: Theory and evidence
Journal of international economics, v 84(1), pp 15-25
2011
Featured in Collection : UN Sustainable Development Goals @ Drexel
Abstract
We explore theoretically and empirically the relationship between intraindustry trade and the skill premium. Our model features a Chamberlinian-type mechanism of income distribution based on quasi-homothetic consumer preferences, non-homothetic production, and factor-biased scale economies at the firm level. The analysis focuses on a two-country, one-sector model of intraindustry trade with two factor inputs consisting of high-skilled and low-skilled labor. We find that a move from autarky to free trade (a) raises the output of the representative firm and its level of total factor productivity, and (b) reduces (raises) the relative wage of high-skilled workers under the hypothesis of output-skill substitutability (output-skill complementarity). Plant-level evidence from Mexico supports the empirical relevance of the proposed income-distribution mechanism.
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Details
- Title
- Intraindustry trade and the skill premium: Theory and evidence
- Creators
- Elias Dinopoulos - University of Florida (USA).Constantinos Syropoulos - Drexel UniversityBin Xu - China Europe International Business SchoolYoto V. Yotov - Drexel University
- Publication Details
- Journal of international economics, v 84(1), pp 15-25
- Publisher
- Elsevier
- Resource Type
- Journal article
- Language
- English
- Academic Unit
- Economics (School of Economics)
- Web of Science ID
- WOS:000291193000002
- Scopus ID
- 2-s2.0-79955016288
- Other Identifier
- 991019168272604721
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- Collaboration types
- Domestic collaboration
- Web of Science research areas
- Economics