IDEAS home Printed from https://ideas.repec.org/a/eee/ecosys/v41y2017i4p524-536.html
   My bibliography  Save this article

Globalisation and the decline of the labour share: A microeconomic perspective

Author

Listed:
  • Perugini, Cristiano
  • Vecchi, Michela
  • Venturini, Francesco

Abstract

This paper contributes to the infant literature on the determinants of the labour share at the level of individual firms and provides novel insights on the effect of firms’ patterns of internationalisation. The analysis is performed using a rich dataset, covering six EU countries (Austria, France, Germany, Hungary, Italy and Spain) and combining information from the EFIGE survey and Amadeus balance sheets. Our results show that the labour share is lower for exporting firms and for those engaged in foreign direct investments or offshoring activities. These findings are robust to an array of sensitivity tests. Our instrumental variable analysis indicates that causation goes from internationalisation to changes in the labour share. An investigation into the channels of the negative impact of internationalisation shows that these effects are not related to the composition of the labour force, technological factors or firm market power. The analysis for subsectors of different technological regimes is consistent with this interpretation.

Suggested Citation

  • Perugini, Cristiano & Vecchi, Michela & Venturini, Francesco, 2017. "Globalisation and the decline of the labour share: A microeconomic perspective," Economic Systems, Elsevier, vol. 41(4), pages 524-536.
    • Handle: RePEc:eee:ecosys:v:41:y:2017:i:4:p:524-536
    DOI: 10.1016/j.ecosys.2017.08.002
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0939362517300791
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.ecosys.2017.08.002?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 search for a different version of it.

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Kyoji Fukao & Cristiano Perugini, 2021. "The Long‐Run Dynamics of the Labor Share in Japan," Review of Income and Wealth, International Association for Research in Income and Wealth, vol. 67(2), pages 445-480, June.
    2. Matteo G. Richiardi & Luis Valenzuela, 2024. "Firm heterogeneity and the aggregate labour share," LABOUR, CEIS, vol. 38(1), pages 66-101, March.
    3. IKEUCHI Kenta & FUKAO Kyoji & Cristiano PERUGINI, 2021. "Establishment Size, Workforce Composition and the College Wage Gap in Japan," Discussion papers 21022, Research Institute of Economy, Trade and Industry (RIETI).
    4. Chih‐Hai Yang & Meng‐Wen Tsou, 2021. "Globalization and the labor share in China: Firm‐level evidence," Manchester School, University of Manchester, vol. 89(1), pages 1-23, January.
    5. Jasmine Mondolo, 2021. "Macroeconomic dynamics and the role of market power. The case of Italy," DEM Working Papers 2021/17, Department of Economics and Management.
    6. Mondolo, Jasmine, 2020. "Macro and microeconomic evidence on investment, factor shares, firm and labor dynamics in Italy and in Trentino," MPRA Paper 99138, University Library of Munich, Germany.
    7. Francesco Bloise & Irene Brunetti & Valeria Cirillo, 2022. "Firm strategies and distributional dynamics: labour share in Italian medium-large firms," Economia Politica: Journal of Analytical and Institutional Economics, Springer;Fondazione Edison, vol. 39(2), pages 623-655, July.
    8. Alessandro Bellocchi & Giovanni Marin & Giuseppe Travaglini, 2021. "The Great Fall of Labor Share:Micro Determinants for EU Countries Over 2011-2019," Working Papers 2102, University of Urbino Carlo Bo, Department of Economics, Society & Politics - Scientific Committee - L. Stefanini & G. Travaglini, revised 2021.
    9. Kyoji Fukao & Koji Ito & Cristiano Perugini, 2019. "A Microeconomic Analysis of the Declining Labor Share in Japan," ADB Institute Series on Development Economics, in: Gary Fields & Saumik Paul (ed.), Labor Income Share in Asia, chapter 0, pages 247-267, Springer.
    10. HEJDUKOVÁ Pavlína & ČERNÁ Marie, 2022. "COVID-19 Pandemic: New Opportunities for Employment and Education?," European Journal of Interdisciplinary Studies, Bucharest Economic Academy, issue 01, March.
    11. Anatolijs Prohorovs & Julija Bistrova, 2022. "Labour Share Convergence in the European Union," Economies, MDPI, vol. 10(9), pages 1-21, August.
    12. Mondolo, Jasmine, 2021. "Macroeconomic dynamics and the role of market power. The case of Italy," MPRA Paper 110172, University Library of Munich, Germany, revised 05 Oct 2021.

    More about this item

    Keywords

    D33; F61; F16; J30; Labour share; Firm-level analysis; Globalisation; Functional income distribution;
    All these keywords.

    JEL classification:

    • D33 - Microeconomics - - Distribution - - - Factor Income Distribution
    • F61 - International Economics - - Economic Impacts of Globalization - - - Microeconomic Impacts
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • J30 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - General

    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:ecosys:v:41:y:2017:i:4:p:524-536. 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.

    We have no bibliographic references for this item. You can help adding them by using 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: https://edirc.repec.org/data/osteide.html .

    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.