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A model of firm heterogeneity in factor intensities and international trade

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  • Julian Emami Namini
  • Giovanni Facchini
  • Ricardo A. López

Abstract

Empirical evidence suggests that exporters are, in addition to being more productive, significantly more skilled‐labour intensive than non‐exporters. In a setting that captures both these features, we show that the firm selection induced by trade liberalization works along two dimensions. First, export growth increases competition for skilled labour. This leads to the exit of some of the skilled‐labour intensive firms, while benefitting unskilled‐labour intensive ones. Second, within the group of firms with the same factor intensities, the reallocation of factors is towards the exporters. We show that the increased competition for skilled labour dampens the positive effect of trade liberalization on sector‐wide TFP and real income. Hétérogénéité dans l’intensité des facteurs des firmes et commerce international: un modèle. Les résultats empiriques suggèrent que les exportateurs – en plus d’être plus productifs – utilisent aussi de manière plus significative une main d’œuvre plus qualifiée que ceux qui n’exportent pas. Dans un environnement qui a ces deux caractéristiques, on montre que la sélection des firmes engendrée par la libéralisation du commerce travaille selon deux dimensions. D’abord, la croissance de l’exportation augmente la demande de main d’œuvre qualifiée. Voilà qui entraîne l’élimination de certaines firmes à forte intensité de main d’oeuvre qualifiée, et bénéficie à celles qui utilisent une main d’œuvre moins qualifiée. Ensuite, entre les firmes qui ont la même intensité dans l’utilisation des facteurs, il y a une réallocation des facteurs vers les firmes exportatrices. On montre que la concurrence accrue pour la main d’œuvre qualifiée atténue l’effet positif de la libéralisation du commerce sur la productivité totale des facteurs au niveau des secteurs et sur le revenu réel.

Suggested Citation

  • Julian Emami Namini & Giovanni Facchini & Ricardo A. López, 2015. "A model of firm heterogeneity in factor intensities and international trade," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 48(4), pages 1456-1480, November.
  • Handle: RePEc:wly:canjec:v:48:y:2015:i:4:p:1456-1480
    DOI: 10.1111/caje.12150
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    References listed on IDEAS

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    1. Roberto Alvarez & Ricardo A. López, 2005. "Exporting and performance: evidence from Chilean plants," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 38(4), pages 1384-1400, November.
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    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation

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