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Barbara Dluhosch's
Scholarly Papers
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Citations
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1.
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Michael C. Burda
Humboldt University of Berlin - Faculty of Economics Barbara Dluhosch
University of Cologne
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26 Feb 01
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11 Aug 04
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278
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Abstract:
This paper proposes a model in which the removal of barriers to trade and factor mobility is associated with endogenous fragmentation of the value-added chain. Fragmentation is the outcome of cost competition; the profit-maximizing choice of cost structure by monopolistically competitive firms. An expansion of the integrated trading area can induce globalization not only in the horizontal dimension associated with love-of-variety preferences, but also in a vertical dimension as firms vary specialization of production stages. While increased trade is likely to induce fragmentation when the number of firms is fixed, free entry can either reverse or intensify this result.
International Trade, Organization of Production, Technology Choice, Division of Labor
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2.
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Michael C. Burda
Humboldt University of Berlin - Faculty of Economics Barbara Dluhosch
University of Cologne
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27 Mar 01
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11 Aug 04
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218
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10
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Abstract:
Fragmentation of the value-added-chain is modeled as the reaction of monopolistically competitive firms to the removal of barriers to trade and factor mobility in an integrated trading environment. Since fragmentation requires high-skilled labor, this form of globalization can induce labor market effects similar to those caused by skill-biased technical change. In the short run, it is likely that fragmentation will be accompanied by an increase in high and low-skilled service employment as well as in the skilled wage premia, as observed in OECD countries. These implications can be reversed, however, as new firms enter the market.
International trade, organization of production, technology choice, division of labor
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3.
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Barbara Dluhosch
University of Cologne
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10 Feb 99
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23 Aug 00
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Abstract:
This paper examines the linkage between trade and the dismal state of labor markets in Europe. On the face of superficial evidence, the nexus is weak and is overshadowed by more compelling evidence of skill-biased technical change. Yet a complete dismissal of globalization is inconsistent with current opinions of businessmen, policy-makers and workers in globalized industries. We propose an alternative model in which globalization--defined as the increase in world trade relative to other indicators of real economic activity--occurs along with deterioration of labor market prospects, especially for the less-skilled. As an alternative or complement to conventional trade and technology explanations, we model both the fragmentation of production and resulting reallocation of economic activity across national boundaries as equilibrium responses to trading opportunities as well as the technology of production. Increasing integration is therefore linked to both trade as well as pervasive skill-biased technical change. The model's predictions are consistent with a number of outstanding empirical puzzles in the trade-wages debate and can also explain the bimodal growth in services (high and low skill) observed in all OECD countries, and especially those with deregulated labor markets.
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