Labor Market Frictions, Firm Growth, and International Trade
AbstractThis paper develops a model to study the aggregate effects of labor market frictions in an open economy through their impact on the growth and investment decisions of firms. The model features interactions between firms’ dynamic fixed investments in exporting and search frictions with job-to-job mobility. Search frictions in worker transitions between jobs induce slow firm growth and are a source of dispersion in firm size and revenue per worker. The model is tractable for general-equilibrium analysis and accommodates several extensions which are useful for quantitative work. A calibration to Argentina’s economy that matches data on firm growth, worker transitions between firms and export dynamics suggests that frictions in job-to-job mobility may have considerable effects on firm growth and aggregate outcomes.
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Bibliographic InfoPaper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 19492.
Date of creation: Oct 2013
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Find related papers by JEL classification:
- D92 - Microeconomics - - Intertemporal Choice - - - Intertemporal Firm Choice, Investment, Capacity, and Financing
- F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
- J62 - Labor and Demographic Economics - - Mobility, Unemployment, Vacancies, and Immigrant Workers - - - Job, Occupational and Intergenerational Mobility; Promotion
- L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
This paper has been announced in the following NEP Reports:
- NEP-ALL-2013-10-11 (All new papers)
- NEP-BEC-2013-10-11 (Business Economics)
- NEP-DGE-2013-10-11 (Dynamic General Equilibrium)
- NEP-LAB-2013-10-11 (Labour Economics)
- NEP-LMA-2013-10-11 (Labor Markets - Supply, Demand, & Wages)
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