Wage share, globalization and crisis: the case of the manufacturing industry in Korea, Mexico and Turkey
The aim of this paper is to analyze the changes in the wage share in the manufacturing industry in Mexico, Turkey and Korea in the era of globalization. The focus is on the one hand on the effects of globalization on the wage share, which is measured by the effects of international trade and FDI intensity of the economy. On the other hand, the process of opening up has been accompanied by major currency crises in most developing countries in the last decade, which has affected the wage share through exchange rate depreciation and economic recession. The paper develops a Post-Keynesian conflicting claims model for an open economy under the pressure of globalization, and an equation for the wage share is estimated for each country using the Seemingly Unrelated Regression method. The results show that both recessions and nominal depreciations have a clear and lasting negative effect on the manufacturing wage share in all countries, whereas the effect of openness, in particular international trade depends on industrial policy structure. Increased export intensity leads to a decline in the manufacturing wage share in Turkey and Mexico, but has no significant effect in Korea. The positive expectations from FDI are also not materialized in any of the three countries.
Volume (Year): 23 (2009)
Issue (Month): 2 ()
|Contact details of provider:|| Web page: http://www.tandfonline.com/CIRA20|
|Order Information:||Web: http://www.tandfonline.com/pricing/journal/CIRA20|
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Philip Arestis, 1986. "Wages and Prices in the UK: The Post Keynesian View," Journal of Post Keynesian Economics, M.E. Sharpe, Inc., vol. 8(3), pages 339-358, April.
- Gerald Epstein & James Burke, 2001. "Threat Effects and the Internationalization of Production," Working Papers wp15, Political Economy Research Institute, University of Massachusetts at Amherst.
- Kivilcim Metin-Ozcan & Ebru Voyvoda & A. Erinc Yeldan, 2000.
"Dynamics of Macroeconomic Adjustment in a Globalized Developing Economy: Growth, Accumulation and Distribution, Turkey 1969-1998,"
2004, Economic Research Forum, revised Feb 2000.
- Erin Yeldan & Kivilcim Metin-…zcan & Ebru Voyvoda, 1999. "Dynamics of Macroeconomic Adjustment in a Globalized Developing Economy : Growth, Accumulation and Distribution, Turkey 1969-1998," Working Papers 9905, Department of Economics, Bilkent University.
- Ann Harrison & Gordon Hanson, 1999.
"Who Gains from Trade Reform? Some Remaining Puzzles,"
NBER Working Papers
6915, National Bureau of Economic Research, Inc.
- Harrison, Ann & Hanson, Gordon, 1999. "Who gains from trade reform? Some remaining puzzles," Journal of Development Economics, Elsevier, vol. 59(1), pages 125-154, June.
- Dollar, David & Kraay, Aart, 2001.
"Trade, growth, and poverty,"
Policy Research Working Paper Series
2615, The World Bank.
- Robert Pollin, 2002. "Globalization and the Transition to Egalitarian Development," Working Papers wp42, Political Economy Research Institute, University of Massachusetts at Amherst.
- Harrison, Ann, 2005. "Has Globalization Eroded Labor’s Share? Some Cross-Country Evidence," MPRA Paper 39649, University Library of Munich, Germany.
- Edwards, Sebastian, 1988. "Terms of Trade, Tariffs, and Labor Market Adjustment in Developing Countries," World Bank Economic Review, World Bank Group, vol. 2(2), pages 165-85, May.
- Özlem Onaran & Engelbert Stockhammer, 2005.
"Two Different Export-Oriented Growth Strategies: Accumulation and Distribution in Turkey and South Korea,"
Emerging Markets Finance and Trade,
M.E. Sharpe, Inc., vol. 41(1), pages 65-89, January.
- Özlem Onaran & Engelbert Stockhammer, 2005. "Two Different Export-Oriented Growth Strategies: Accumulation and Distribution in Turkey and South Korea," Emerging Markets Finance and Trade, Taylor & Francis Journals, vol. 41(1), pages 65-89, January.
- James Crotty & Kang-Kook Lee, 2002. "A political-economic analysis of the failure of neo-liberal restructuring in post-crisis Korea," Cambridge Journal of Economics, Oxford University Press, vol. 26(5), pages 667-678, September.
- Milner, Chris & Wright, Peter, 1998. "Modelling Labour Market Adjustment to Trade Liberalisation in an Industrialising Economy," Economic Journal, Royal Economic Society, vol. 108(447), pages 509-28, March.
- Douglas Gollin, 2001.
"Getting Income Shares Right,"
Department of Economics Working Papers
2001-11, Department of Economics, Williams College.
- Rowthorn, R E, 1977. "Conflict, Inflation and Money," Cambridge Journal of Economics, Oxford University Press, vol. 1(3), pages 215-39, September.
- Ozlem Onaran & Nurhan Yenturk, 2001. "Do Low Wages Stimulate Investment? An analysis of the relationship between distribution and investment in Turkish private manufacturing industry," International Review of Applied Economics, Taylor & Francis Journals, vol. 15(4), pages 359-374.
- Gary Dymski & James Crotty, 2000. "Can the Global Neoliberal Regime Survive Victory in Asia? The Political Economy of the Asian Crisis," Published Studies ps5, Political Economy Research Institute, University of Massachusetts at Amherst.
When requesting a correction, please mention this item's handle: RePEc:taf:irapec:v:23:y:2009:i:2:p:113-134. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Michael McNulty)
If references are entirely missing, you can add them using this form.