Trade shocks and factor adjustment frictions: Implications for investment and labor
When export opportunities arise, the gains from trade can only be materialized if the economy adjusts. In order to expand and meet new markets, firms must hire new workers and tune their capital stock by investing in product lines, machines and equipment. If this process is costly and imperfect, the...
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| Autores principales: | , , , |
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| Formato: | Articulo Documento de trabajo |
| Lenguaje: | Inglés |
| Publicado: |
2013
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| Acceso en línea: | http://sedici.unlp.edu.ar/handle/10915/46229 http://www.depeco.econo.unlp.edu.ar/doctrab/doc101.pdf |
| Aporte de: |
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I19-R120-10915-46229 |
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| record_format |
dspace |
| institution |
Universidad Nacional de La Plata |
| institution_str |
I-19 |
| repository_str |
R-120 |
| collection |
SEDICI (UNLP) |
| language |
Inglés |
| topic |
Ciencias Económicas trade shocks capital adjustment costs labor motility firm heterogeneity investment labor market dynamics inversión JEL: F6, F16 empleo |
| spellingShingle |
Ciencias Económicas trade shocks capital adjustment costs labor motility firm heterogeneity investment labor market dynamics inversión JEL: F6, F16 empleo Artuç, Erhan Bet, Carlos Germán Brambilla, Irene Porto, Guido Trade shocks and factor adjustment frictions: Implications for investment and labor |
| topic_facet |
Ciencias Económicas trade shocks capital adjustment costs labor motility firm heterogeneity investment labor market dynamics inversión JEL: F6, F16 empleo |
| description |
When export opportunities arise, the gains from trade can only be materialized if the economy adjusts. In order to expand and meet new markets, firms must hire new workers and tune their capital stock by investing in product lines, machines and equipment. If this process is costly and imperfect, the economy reacts partially and gradually. We formulate a multi-sector dynamic model featuring capital adjustment costs, firm heterogeneity, and labor mobility costs that we fit to data from Argentina. We estimate the structural capital and labor adjustment cost parameters and using counterfactual simulations we quantify the complementarity between trade shocks and domestic frictions: in the presence of lower costs of factor adjustment there is a sizeable incremental impact of trade shocks on capital, employment, wages, and output. The complementarity is larger for smaller trade shocks, and a large fraction of the capital complementarity is explained by an extensive margin (i.e. firms which do not respond to trade shocks when adjustment costs are high). |
| format |
Articulo Documento de trabajo |
| author |
Artuç, Erhan Bet, Carlos Germán Brambilla, Irene Porto, Guido |
| author_facet |
Artuç, Erhan Bet, Carlos Germán Brambilla, Irene Porto, Guido |
| author_sort |
Artuç, Erhan |
| title |
Trade shocks and factor adjustment frictions: Implications for investment and labor |
| title_short |
Trade shocks and factor adjustment frictions: Implications for investment and labor |
| title_full |
Trade shocks and factor adjustment frictions: Implications for investment and labor |
| title_fullStr |
Trade shocks and factor adjustment frictions: Implications for investment and labor |
| title_full_unstemmed |
Trade shocks and factor adjustment frictions: Implications for investment and labor |
| title_sort |
trade shocks and factor adjustment frictions: implications for investment and labor |
| publishDate |
2013 |
| url |
http://sedici.unlp.edu.ar/handle/10915/46229 http://www.depeco.econo.unlp.edu.ar/doctrab/doc101.pdf |
| work_keys_str_mv |
AT artucerhan tradeshocksandfactoradjustmentfrictionsimplicationsforinvestmentandlabor AT betcarlosgerman tradeshocksandfactoradjustmentfrictionsimplicationsforinvestmentandlabor AT brambillairene tradeshocksandfactoradjustmentfrictionsimplicationsforinvestmentandlabor AT portoguido tradeshocksandfactoradjustmentfrictionsimplicationsforinvestmentandlabor |
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Repositorios |
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