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International knowledge spillovers and wage inequality in developing countries

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  • Wang, Ming-cheng
  • Fang, Chen-ray
  • Huang, Li-hsuan
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    Abstract

    In this paper, international knowledge spillovers are incorporated in a horizontal innovation model, designed to explain the observed uncertain effects that openness of trade can have on wage inequality in small developing countries. Openness of trade can produce two different effects: an increase in the relative price of less-skilled labor-intensive products and a wider skill discrepancy due to knowledge spillovers from the more to less developed country. The former triggers a fall in the wage premium, while the latter widens the wage premium gap in a developing country. These two opposing forces explain the observed uncertain effects of openness to trade on wage inequality in developing countries.

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    Bibliographic Info

    Article provided by Elsevier in its journal Economic Modelling.

    Volume (Year): 26 (2009)
    Issue (Month): 6 (November)
    Pages: 1208-1214

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    Handle: RePEc:eee:ecmode:v:26:y:2009:i:6:p:1208-1214

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    Web page: http://www.elsevier.com/locate/inca/30411

    Related research

    Keywords: International knowledge spillovers Wage inequality Developing country Endogenous growth model;

    References

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    Citations

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    Cited by:
    1. Pi, Jiancai & Zhou, Yu, 2013. "Institutional quality and skilled–unskilled wage inequality," Economic Modelling, Elsevier, vol. 35(C), pages 356-363.
    2. Anwar, Sajid & Sun, Sizhong & Valadkhani, Abbas, 2013. "International outsourcing of skill intensive tasks and wage inequality," Economic Modelling, Elsevier, vol. 31(C), pages 590-597.
    3. Jean Guinet & Dirk Meissner, 2012. "Open Innovation: Implications for Corporate Strategies, Government Policy and International R&D Spillovers," Foresight-Russia, National Research University Higher School of Economics, vol. 6(1), pages 26-36.
    4. Gupta, Manash Ranjan & Dutta, Priya Brata, 2010. "Skilled-unskilled wage inequality: A general equilibrium analysis," Research in Economics, Elsevier, vol. 64(4), pages 247-263, December.
    5. Gupta, Manash Ranjan & Dutta, Priya Brata, 2010. "Skilled-unskilled wage inequality, nontraded good and endogenous supply of skilled labour: A theoretical analysis," Economic Modelling, Elsevier, vol. 27(5), pages 923-934, September.
    6. repec:hig:journl:v:6:y:2012:i:1:p:26-36 is not listed on IDEAS
    7. Gupta, Manash Ranjan & Dutta, Priya Brata, 2011. "Skilled-unskilled wage inequality and unemployment: A general equilibrium analysis," Economic Modelling, Elsevier, vol. 28(4), pages 1977-1983, July.
    8. Gupta, Manash Ranjan & Dutta, Priya Brata, 2012. "Skilled–unskilled wage inequality, product variety, public input and increasing returns: A static general equilibrium analysis," Economic Modelling, Elsevier, vol. 29(2), pages 502-513.

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