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Convex vacancy creation costs and on-the-job search in a global economy

Title data

Holzner, Christian ; Larch, Mario:
Convex vacancy creation costs and on-the-job search in a global economy.
In: The World Economy. Vol. 45 (2022) Issue 1 . - pp. 136-175.
ISSN 1467-9701
DOI: https://doi.org/10.1111/twec.13136

Abstract in another language

Convex vacancy creation costs shape firms’ responses to trade liberalisation. They induce capacity constraints by increasing firms’ costs of production. A profit maximising firm will therefore not fully meet the increased foreign demand, but serve only a few export markets. More productive firms will export to more countries and profit more from trade liberalisation. To get an effect of trade liberalisation on wage inequality, we need on-the-job search and convex vacancy creation costs because with linear costs trade liberalisation affects all wages in equal proportion. Furthermore, with convex vacancy creation costs, not all firms export to all foreign markets even if trade is fully liberalised. This implies that wage inequality under free trade is always higher than under autarky.

Further data

Item Type: Article in a journal
Refereed: Yes
Institutions of the University: Faculties > Faculty of Law, Business and Economics
Faculties > Faculty of Law, Business and Economics > Department of Economics
Faculties > Faculty of Law, Business and Economics > Department of Economics > Chair Economics VI: Empirical Economic Research
Faculties > Faculty of Law, Business and Economics > Department of Economics > Chair Economics VI: Empirical Economic Research > Chair Economics VI: Empirical Economic Research - Univ.-Prof. Dr. Mario Larch
Result of work at the UBT: Yes
DDC Subjects: 300 Social sciences > 330 Economics
Date Deposited: 02 Jun 2022 06:29
Last Modified: 02 Jun 2022 06:29
URI: https://eref.uni-bayreuth.de/id/eprint/69890