Trade and technology adoption in distorted economies

• 成果类型: Article
• 署名作者: Farrokhi, Farid; Lashkaripour, Ahmad; Pellegrina, Heitor S.
• 署名单位: Purdue University System; Purdue University; Indiana University System; Indiana University Bloomington; University of Notre Dame
• 刊物名称: JOURNAL OF INTERNATIONAL ECONOMICS
• ISSN/ISSBN: 0022-1996
• DOI: 10.1016/j.jinteco.2024.103922
• 发表日期: 2024
• 关键词: trade; technology adoption; Labor Market Distortions; developing economies

摘要

This paper examines how labor market imperfections distort firm-level technology choices and alter the gains from trade in developing countries. Motivated by evidence that firms using modern technologies are disproportionately exposed to labor market distortions, we introduce firm-level technology choices and labor market distortions into an otherwise standard quantitative trade model. We then provide formulas for the welfare and labor productivity gains from trade liberalization, highlighting the role of distortions and technology choice. Our quantitative analysis reveals that labor market distortions provide a possible explanation for the inefficiently low levels of modern technology adoption in developing countries. Moreover, labor market distortions erode one-third of the potential labor productivity gains from trade liberalization among low-income countries.