IDEAS home Printed from https://ideas.repec.org/a/eee/ecolet/v186y2020ics016517651930429x.html

Effect of product obsolescence on wages: Role of international trade and skill levels

Author

Listed:
  • Lahiri, Bidisha
  • Han, Luyi

Abstract

Trade competition generated R&D labor demand is strongest for medium life length products and is more relevant for skilled workers. Forward citation lag of patents captures product life lengths. The theoretically predicted non-monotonic relationship is observed in the empirical analysis.

Suggested Citation

  • Lahiri, Bidisha & Han, Luyi, 2020. "Effect of product obsolescence on wages: Role of international trade and skill levels," Economics Letters, Elsevier, vol. 186(C).
    • Handle: RePEc:eee:ecolet:v:186:y:2020:i:c:s016517651930429x
    DOI: 10.1016/j.econlet.2019.108851
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S016517651930429X
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.econlet.2019.108851?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    References listed on IDEAS

    as
    1. L. Kamran Bilir, 2014. "Patent Laws, Product Life-Cycle Lengths, and Multinational Activity," American Economic Review, American Economic Association, vol. 104(7), pages 1979-2013, July.
    2. Feenstra, Robert C & Hanson, Gordon H, 1996. "Globalization, Outsourcing, and Wage Inequality," American Economic Review, American Economic Association, vol. 86(2), pages 240-245, May.
    3. Bernard, Andrew B. & Jensen, J. Bradford & Schott, Peter K., 2006. "Survival of the best fit: Exposure to low-wage countries and the (uneven) growth of U.S. manufacturing plants," Journal of International Economics, Elsevier, vol. 68(1), pages 219-237, January.
    4. Susan Chun Zhu, 2004. "Trade, product cycles, and inequality within and between countries," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 37(4), pages 1042-1060, November.
    5. Krugman, Paul, 1979. "A Model of Innovation, Technology Transfer, and the World Distribution of Income," Journal of Political Economy, University of Chicago Press, vol. 87(2), pages 253-266, April.
    6. Daron Acemoglu, 1998. "Why Do New Technologies Complement Skills? Directed Technical Change and Wage Inequality," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 113(4), pages 1055-1089.
    7. Gene M. Grossman & Elhanan Helpman, 1991. "Quality Ladders and Product Cycles," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 106(2), pages 557-586.
    8. Susan Chun Zhu, 2004. "Trade, product cycles, and inequality within and between countries," Canadian Journal of Economics, Canadian Economics Association, vol. 37(4), pages 1042-1060, November.
    9. Lu, Chia-Hui, 2007. "Moving up or moving out? A unified theory of R&D, FDI, and trade," Journal of International Economics, Elsevier, vol. 71(2), pages 324-343, April.
    10. repec:fth:michin:323 is not listed on IDEAS
    11. Raymond Vernon, 1966. "International Investment and International Trade in the Product Cycle," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 80(2), pages 190-207.
    12. Zhu, Susan Chun, 2005. "Can product cycles explain skill upgrading?," Journal of International Economics, Elsevier, vol. 66(1), pages 131-155, May.
    13. Gene M. Grossman & Elhanan Helpman, 2018. "Growth, Trade, and Inequality," Econometrica, Econometric Society, vol. 86(1), pages 37-83, January.
    14. Peter K. Schott, 2003. "One Size Fits All? Heckscher-Ohlin Specialization in Global Production," American Economic Review, American Economic Association, vol. 93(3), pages 686-708, June.
    15. Amy Jocelyn Glassa & Kamal Saggi, 2023. "Innovation and wage effects of international outsourcing," World Scientific Book Chapters, in: Kamal Saggi (ed.), Technology Transfer, Foreign Direct Investment, and the Protection of Intellectual Property in the Global Economy, chapter 2, pages 33-52, World Scientific Publishing Co. Pte. Ltd..
    16. Daron Acemoglu & Gino Gancia & Fabrizio Zilibotti, 2015. "Offshoring and Directed Technical Change," American Economic Journal: Macroeconomics, American Economic Association, vol. 7(3), pages 84-122, July.
    17. Johnson, George E & Stafford, Frank P, 1993. "International Competition and Real Wages," American Economic Review, American Economic Association, vol. 83(2), pages 127-130, May.
    18. Ethier, Wilfred J., 2005. "Globalization, globalisation: Trade, technology, and wages," International Review of Economics & Finance, Elsevier, vol. 14(3), pages 237-258.
    19. Butler, Alison & Dueker, Michael, 1999. "Does foreign innovation affect domestic wage inequality?," Journal of International Economics, Elsevier, vol. 47(1), pages 61-89, February.
    20. Feenstra, Robert C. & Hanson, Gordon H., 1997. "Foreign direct investment and relative wages: Evidence from Mexico's maquiladoras," Journal of International Economics, Elsevier, vol. 42(3-4), pages 371-393, May.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Audretsch, David & Sanders, Mark, 2007. "Globalization and the Rise of the Entrepreneurial Economy," CEPR Discussion Papers 6247, C.E.P.R. Discussion Papers.
    2. Hitoshi Tanaka & Tatsuro Iwaisako, 2009. "Product cycles, endogenous skill acquisition, and wage inequality," Canadian Journal of Economics, Canadian Economics Association, vol. 42(1), pages 300-331, February.
    3. Chen, Xiaoping & Lu, Yi & Zhu, Lianming, 2017. "Product cycle, contractibility, and global sourcing," Journal of Development Economics, Elsevier, vol. 127(C), pages 283-296.
    4. Zhu, Susan Chun, 2005. "Can product cycles explain skill upgrading?," Journal of International Economics, Elsevier, vol. 66(1), pages 131-155, May.
    5. Yuxiang Zou & Tai-Liang Chen, 2018. "Industrial heterogeneity and international product cycles," Journal of Economics, Springer, vol. 125(1), pages 1-25, September.
    6. Lu, Chia-Hui, 2007. "Moving up or moving out? A unified theory of R&D, FDI, and trade," Journal of International Economics, Elsevier, vol. 71(2), pages 324-343, April.
    7. Goel, Manisha, 2017. "Offshoring – Effects on technology and implications for the labor market," European Economic Review, Elsevier, vol. 98(C), pages 217-239.
    8. Edwin L.-C. Lai, 2008. "Globalization of production and the technology transfer paradox," Working Papers 0810, Federal Reserve Bank of Dallas.
    9. Liu, Ying & Wang, Zhe & Yin, Xiaopeng, 2016. "Economic integration, product cycles and regime effects," International Review of Economics & Finance, Elsevier, vol. 43(C), pages 275-283.
    10. Chen, Hung-Ju, 2013. "Intellectual Property Rights and Skills Accumulation: A North-South Model of FDI and Outsourcing," MPRA Paper 45035, University Library of Munich, Germany.
    11. Ma, Yan, 2015. "The product cycle hypothesis: The role of quality upgrading and market size," International Review of Economics & Finance, Elsevier, vol. 39(C), pages 326-336.
    12. Meng, Xianwei & Wei, Xuan, 2016. "A Dynamic Model of Effects of Effects of Trade and Environmental Policies on Firms' Offshoring and Clean Technology Adoption Decisions," 2016 Annual Meeting, July 31-August 2, Boston, Massachusetts 236064, Agricultural and Applied Economics Association.
    13. Yasar, Mahmut & Rejesus, Roderick M., 2020. "International linkages, technology transfer, and the skilled labor wage share: Evidence from plant-level data in Indonesia," World Development, Elsevier, vol. 128(C).
    14. Li, Hongbin & Li, Lei & Ma, Hong, 2022. "China's skill-biased imports," China Economic Review, Elsevier, vol. 74(C).
    15. Chen, Hung-Ju, 2015. "Intellectual property rights and skills accumulation: A product-cycle model of FDI and outsourcing," Journal of Macroeconomics, Elsevier, vol. 46(C), pages 328-343.
    16. Kamal Saggi, 2016. "Trade, Intellectual Property Rights, and the World Trade Organization," Vanderbilt University Department of Economics Working Papers 16-00014, Vanderbilt University Department of Economics.
    17. repec:ilo:ilowps:366690 is not listed on IDEAS
    18. Chen, Hung-Ju, 2019. "Innovation and FDI: Does the Target of Intellectual Property Rights Matter?," MPRA Paper 94692, University Library of Munich, Germany.
    19. Daron Acemoglu & Fabrizio Zilibotti, 2001. "Productivity Differences," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 116(2), pages 563-606.
    20. Yang, Guifang & Maskus, Keith E., 2001. "Intellectual property rights, licensing, and innovation in an endogenous product-cycle model," Journal of International Economics, Elsevier, vol. 53(1), pages 169-187, February.
    21. Li, Huijuan & Cai, Weihong & Li, Wenxiu, 2021. "Does global value chains participation improve skill premium? Mediating role of skill-biased technological change," Economic Modelling, Elsevier, vol. 99(C).

    More about this item

    Keywords

    ;
    ;
    ;
    ;
    ;
    ;

    JEL classification:

    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • J23 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Labor Demand
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:ecolet:v:186:y:2020:i:c:s016517651930429x. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/ecolet .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.