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Firms’ Main Market, Human Capital, and Wages Author info | Abstract | Publisher info | Download info | Related research | Statistics Alcala Agullo, Francisco
Hernández Martínez, Pedro Jesús (Departamentos y Servicios::Departamentos de la UMU::Fundamentos del Análisis Económico)
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This paper contributes to the recent literature on the exporter wage premium. The literature has focused on an exporter/non-exporter dichotomy. Instead, this paper provides first evidence that there is a more continuous destination-market effect. Using Spanish data, we estimate wage premia for establishments selling to the national, European Union, and rest of the world markets (wages in local-market establishments are the reference). Controlling for worker and establishment characteristics, output-market wage premia are increasing in market remoteness and employee education. Establishment human capital is also increasing in output-market remoteness. On the theoretical side, the paper builds a model predicting that firms selling to more-remote markets employ higher human capital and pay higher wages to employees within each education group. The channel linking these variables is firms’ endogenous choice of quality. The model provides a potential explanation for the empirical results in the paper, which is consistent with the evidence on the positive relationship between output-market remoteness and quality of exports put forward by recent trade literature..
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Paper provided by Murcia University, DIGITUM. Universidad de Murcia in its series Annals of Computational Economics with number
4102.
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Length: 29
Date of creation: Dec 2006Date of revision:
Handle: RePEc:mur:wpaper:4102Contact details of provider: Web page: http://www.um.es/fee/ More information through EDIRC
For technical questions regarding this item, or to correct its listing, contact: (Enrique Mingorance Cano).
Keywords: wage inequality ; international trade ; Alchian-Allen effect ; vertical differentiation ; Find related papers by JEL classification: F16 - International Economics - - Trade - - - Trade and Labor Market Interactions J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
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