Julian Emami Namini () (Erasmus School of Economics, Erasmus University Rotterdam)
Abstract
This paper presents a trade model with capital and labor as factors of production. The main contribution of this paper is that it considers a new type of firm heterogeneity, which is empirically relevant: firms in this paper differ with respect to their factor shares in production. Therefore, this paper addresses the following four empirical facts on globalization, firms’ factor shares and factor prices: (i) firms within narrowly defined industries exhibit a large degree of heterogeneity in factor shares in production; (ii) exporters are, on average, more capital intensive than non—exporters; (iii) globalization decreases labor’s share in national income; (iv) the larger the share of exporters in the industry, the larger the increase in the industry’s wages due to globalization.
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Find related papers by JEL classification: F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies L11 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Production, Pricing, and Market Structure; Size Distribution of Firms
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