Employment Dynamics and Import Competition
AbstractThis paper develops a new way to quantify the effects of import competition on intra-industry patterns of job creation and destruction. It is based on an industrial evolution model with imperfectly competitive product markets, heterogeneous firms, and endogenous entry and exit. First, Colombian panel data on metal product producers are used to identify the model's parameters, including the sunk start-up costs faced by new firms, the stochastic process that governs firms' idiosyncratic productivity shocks, and the hiring and firing costs associated with changing employment levels. Then several counterfactual trade policy experiments are conducted. In addition to quantifying the effects of openness on job turnover patterns, the model delivers predictions on the associated changes in labor productivity, the nature of the transition process when openness changes, and the role of hiring and firing costs in shaping firms' responses
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Bibliographic InfoPaper provided by Society for Economic Dynamics in its series 2006 Meeting Papers with number 298.
Date of creation: 03 Dec 2006
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Postal: Society for Economic Dynamics Christian Zimmermann Economic Research Federal Reserve Bank of St. Louis PO Box 442 St. Louis MO 63166-0442 USA
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import competition industry dynamics monopolistic competition;
Find related papers by JEL classification:
- F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
- L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
- C10 - Mathematical and Quantitative Methods - - Econometric and Statistical Methods and Methodology: General - - - General
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- Esra Durceylan-Kaygusuz, 2009. "Managerial Effort, Agency, and Industrial Evolution," 2009 Meeting Papers 589, Society for Economic Dynamics.
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