This paper presents a simple methodology to estimate the elasticity of substitution between labor and capital for firms operating in perfectly competitive markets with CRS production functions. It is applied in a cross-country sample to 28 3-digit ISIC manufacturing industries. The econometric...

The paper demonstrates that two relatively unknown features of the employment cycle in U.S. manufacturing industries can provide a clue to understanding the role of sectorial shocks in the evolution of aggregate employment. First, interindustry wage differentials rise in expansions and fall in...

International wage differences -driven by international technology or factor endowment differences-encourage the flow of Foreign Direct Investment from high- to low-wage countries. However, the access of high-technology firms may drive domestic wages up, dampening the incentives for FDI flows. A...

El presente trabajo discute las oportunidades y desafíos que enfrenta Chile debido a la apertura y el crecimiento experimentado por China a partir de 1978. Para ello, se identifica el grado de competencia de las exportaciones Chinas para los productores Chilenos en distintas industrias, así...

The profitability gap between state-owned enterprises and the non-state industrial sector in China is significant. Using a highly-disaggregated database of China’s industry in 2003, we estimate an average return to capital in state-owned enterprises about 9% that of foreign-invested firms, and...

FDI introduces competition between foreign and domestic firms at the factor market level. If the latter are technology backward, cost pressures render them uncompetitive, and absolute advantage determine the pattern of foreign and domestic firms’ production. To compensate for technology...

The unemployment path in the United States in the last forty years can be significantly explained by the evolution of excessive real wages. An estimation of the evolution of market-clearing wages is presented and its difference with observed average wages - the wage gap - is shown to track...

Globalization, in its multiple interpretations, is seen by many people as a great possibility of improving living standards in developing countries. Trade and financial integration can encourage competition, technology transfers and specialization according to comparative advantage principles....

In the last two decades tariffs around the globe have fallen significantly. However, less well known are their changes in the sectorial structure of protection rates. Between 1988 and 1998, relative tariffs have increased in capital-intensive sectors, and this shift is specially strong in low...

This paper presents a model that introduces foreign firms' competition in product and factor markets in an otherwise standard tariff liberalization setting. Pressures on factor markets from more advanced foreign firms undermine the competitive position of native enterprises. The final impact on...