Template-Type: ReDIF-Paper 1.0
Series: Tinbergen Institute Discussion Papers
Creation-Date: 2009-02-24
Number: 09-020/1
Author-Name: Julian Emami Namini
Author-Email: emaminamini@ese.eur.nl
Author-Workplace-Name: Erasmus School of Economics, Erasmus University Rotterdam
Title: International Trade with Firm Heterogeneity in Factor Shares
Abstract: This paper presents a trade model with capital and labor as factors of production. The main contribution of this paper is that it considers a new type of firm heterogeneity, which is empirically relevant: firms in this paper differ with respect to their factor shares in production. Therefore, this paper addresses the following four empirical facts on globalization, firms’ factor shares and factor prices: (i) firms within narrowly defined industries exhibit a large degree of heterogeneity in factor shares in production; (ii) exporters are, on average, more capital intensive than non—exporters; (iii) globalization decreases labor’s share in national income; (iv) the larger the share of exporters in the industry, the larger the increase in the industry’s wages due to globalization.
Classification-JEL: F12, L11
Keywords: two—factor trade model, firm heterogeneity in factor shares
File-Url: https://papers.tinbergen.nl/09020.pdf
File-Format: application/pdf
File-Size: 652789 bytes
Handle: RePEc:tin:wpaper:20090020