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Essays on the impact of international trade and labor regulation on firms
[Essais sur l'impact du commerce international et de la réglementation du travail sur les entreprises]

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  • Gabriel Smagghue

    (ECON - Département d'économie (Sciences Po) - Sciences Po - Sciences Po - CNRS - Centre National de la Recherche Scientifique)

Abstract

Recent literature in international economics and macroeconomics has pointed to the major role played by large firms in shaping aggregate economic outcomes. Large firms influence, inter alia, economic fluctuations, performance on export markets and inequalities between workers and between consumers. It is therefore crucial to understand how large firms emerge and behave. In the present thesis, I look at three independent aspects of this question. First, I study how exporting firms adjust the quality of the products they export in response to an intensification of "low-cost" competition in foreign markets. To this end, I develop a new method to estimate the quality of products at the firm-level and I find evidence that firms upgrade quality in response to "low-cost" competition. Second, I investigate the way exporting firms adjust their sales when a demand shock (e.g. an economic recession, a war) occurs in one of their destinations. In the context of the Champagne wine industry during the 2000-2001 economic recession, I show that firms reallocate their sales toward markets where demand conditions are relatively more favorable. Lastly, I look at the way firms adjust their size and their mix of capital and labor in response to labor regulations which are more binding to large firms. I find that firms shrink and substitute capital for labor to mitigate the labor cost of the regulation. At the aggregate level, preliminary results suggests that workers gain from the regulation while capital owners lose.

Suggested Citation

  • Gabriel Smagghue, 2014. "Essays on the impact of international trade and labor regulation on firms [Essais sur l'impact du commerce international et de la réglementation du travail sur les entreprises]," SciencePo Working papers Main tel-03512807, HAL.
  • Handle: RePEc:hal:spmain:tel-03512807
    Note: View the original document on HAL open archive server: https://theses.hal.science/tel-03512807
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    References listed on IDEAS

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    1. Daniel Trefler, 2004. "The Long and Short of the Canada-U. S. Free Trade Agreement," American Economic Review, American Economic Association, vol. 94(4), pages 870-895, September.
    2. Eric A. Verhoogen, 2008. "Trade, Quality Upgrading, and Wage Inequality in the Mexican Manufacturing Sector," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 123(2), pages 489-530.
    3. Vannoorenberghe, G., 2012. "Firm-level volatility and exports," Journal of International Economics, Elsevier, vol. 86(1), pages 57-67.
    4. Larry Westphal, 2002. "Technology Strategies For Economic Development In A Fast Changing Global Economy," Economics of Innovation and New Technology, Taylor & Francis Journals, vol. 11(4-5), pages 275-320.
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