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Mining Surplus: Modeling James A. Schmitz's Link Between Competition and Productivity

Listed author(s):
  • Jeremy Greenwood

    (University of Pennsylvania)

  • David Weiss

    (Tel Aviv University)

James A. Schmitz (2005) documents, in a well-known case study, a dramatic rise in productivity in the U.S. and Canadian iron-ore industry following an increase in competition from Brazil. Prior to the increased competition, the industry was not competitive. Surplus in profits was divided between business and unions. Schmitz attributes the increase in productivity to a change in work practices in the industry, as old negotiated union work rules were abandoned or modified. This research formalizes a mechanism through which a rise in competition can lead to increased productivity in the iron-ore industry. International Economic Review, forthcoming.
(This abstract was borrowed from another version of this item.)

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File URL: http://rcer.econ.rochester.edu/RCERPAPERS/rcer_602.pdf
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Paper provided by University of Rochester - Center for Economic Research (RCER) in its series RCER Working Papers with number 602.

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Length: 35 pages
Date of creation: Aug 2017
Handle: RePEc:roc:rocher:602
Contact details of provider: Postal:
University of Rochester, Center for Economic Research, Department of Economics, Harkness 231 Rochester, New York 14627 U.S.A.

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  1. Karen A. Kopecky, 2011. "The Trend In Retirement," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 52(2), pages 287-316, May.
  2. Thomas J. Holmes & David K. Levine & James A. Schmitz, 2012. "Monopoly and the Incentive to Innovate When Adoption Involves Switchover Disruptions," American Economic Journal: Microeconomics, American Economic Association, vol. 4(3), pages 1-33, August.
  3. Bridgman, Benjamin, 2015. "Competition, work rules and productivity," Journal of Economic Dynamics and Control, Elsevier, vol. 52(C), pages 136-149.
  4. Thomas J. Holmes & James A. Schmitz, 2010. "Competition and Productivity: A Review of Evidence," Annual Review of Economics, Annual Reviews, vol. 2(1), pages 619-642, September.
  5. Edward E. Leamer, 1999. "Effort, Wages, and the International Division of Labor," Journal of Political Economy, University of Chicago Press, vol. 107(6), pages 1127-1162, December.
  6. repec:sae:ilrrev:v:70:y:2017:i:3:p:733-766 is not listed on IDEAS
  7. Nicholas Bloom & Erik Brynjolfsson & Lucia Foster & Ron Jarmin & Megha Patnaik & Itay Saporta-Eksten & John Van Reenen, 2017. "What Drives Differences in Management?," CEP Discussion Papers dp1470, Centre for Economic Performance, LSE.
  8. Dinlersoz, Emin & Greenwood, Jeremy & Hyatt, Henry R., 2014. "Who Do Unions Target? Unionization over the Life-Cycle of U.S. Businesses," IZA Discussion Papers 8416, Institute for the Study of Labor (IZA).
  9. Thomas J. Holmes & James A. Schmitz, 2001. "Competition at work : railroads vs. monopoly in the U.S. shipping industry," Quarterly Review, Federal Reserve Bank of Minneapolis, issue Spr, pages 3-29.
  10. Emin Dinlersoz & Jeremy Greenwood & Henry Hyatt, 2017. "What Businesses Attract Unions? Unionization over the Life Cycle of U.S. Establishments," ILR Review, Cornell University, ILR School, vol. 70(3), pages 733-766, May.
  11. Edward C. Prescott & Stephen L. Parente, 1999. "Monopoly Rights: A Barrier to Riches," American Economic Review, American Economic Association, vol. 89(5), pages 1216-1233, December.
  12. K, S Chalapati Rao & Dhar, Biswajit, 2011. "India's FDI Inflows: Trends and Concepts," MPRA Paper 29153, University Library of Munich, Germany.
  13. James A. Schmitz Jr., 2005. "What Determines Productivity? Lessons from the Dramatic Recovery of the U.S. and Canadian Iron Ore Industries Following Their Early 1980s Crisis," Journal of Political Economy, University of Chicago Press, vol. 113(3), pages 582-625, June.
  14. Harold L. Cole & Lee E. Ohanian, 2004. "New Deal Policies and the Persistence of the Great Depression: A General Equilibrium Analysis," Journal of Political Economy, University of Chicago Press, vol. 112(4), pages 779-816, August.
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