International competition, downsizing and wage inequality

• 成果类型: Article
• 署名作者: Walde, Klaus; Weiss, Pia
• 署名单位: University of Wurzburg; Technische Universitat Chemnitz; Universite Catholique Louvain
• 刊物名称: JOURNAL OF INTERNATIONAL ECONOMICS
• ISSN/ISSBN: 0022-1996
• DOI: 10.1016/j.jinteco.2007.03.006
• 发表日期: 2007
• 页码: 396-406
• 关键词: International trade; wage inequality; foreign competition

摘要

A country with Cournot competition and free entry experiences an increase of its market size either due to economic growth or international integration of its goods markets. This implied increase in competition leads to shrinking mark-ups and forces firms to reduce overhead costs relative to output. This implies a reallocation at the aggregate level from administrative to productive activities. Relative factor rewards change and wage inequality increases. The factor which loses in relative terms can even lose in real terms. From a quantitative perspective, international competition is demonstrated to be the more plausible cause of rising wage inequality. (C) 2007 Published by Elsevier B.V.