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Employment Dynamics and Import Competition


  • Hale Utar

    () (Department of Economics Penn State University)


This 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

Suggested Citation

  • Hale Utar, 2006. "Employment Dynamics and Import Competition," 2006 Meeting Papers 298, Society for Economic Dynamics.
  • Handle: RePEc:red:sed006:298

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    Cited by:

    1. Pessoa, João Paulo, 2016. "International competition and labor market adjustment," LSE Research Online Documents on Economics 66426, London School of Economics and Political Science, LSE Library.
    2. Esra Durceylan-Kaygusuz, 2009. "Managerial Effort, Agency, and Industrial Evolution," 2009 Meeting Papers 589, Society for Economic Dynamics.

    More about this item


    import competition industry dynamics monopolistic competition;

    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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