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Wong, Horng Chern (2020) Essays on firms’ roles in labor markets and international trade. PhD thesis, University of Warwick.
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Official URL: http://webcat.warwick.ac.uk/record=b3714782
Abstract
This thesis contains three essays on how firms shape wage differences in the labor market and spatial trade patterns in international goods markets. Chapter 1 asks: why do some firms pay a wage premium relative to other firms for identical workers? To unpack the firm wage premium distribution, I develop and implement a novel structural decomposition using datasets covering the universe of employers and employees in France. Existing research shows that firm wage premia depend on firms’ labor productivity and wage-setting power. This paper shows that they also depend on firms’ product market power and labor share of production. My decomposition reveals important relationships between these firm characteristics. First, the negative relationship between labor productivity and the labor share of production (i) provides a new explanation for exceptionally productive superstar firms’ low labor shares of revenue, and (ii) implies that conventional measures of labor misallocation overstate the degree of misallocation. Second, firms with more product market power generally do not have more labor market power, but superstar firms have more market power in both markets than other firms.
Chapter 2 asks: why do larger firms pay higher wages? I revisit the well-known positive relationship between employer size and wages using administrative micro-data from France. I find that this empirical relationship is substantially weaker in services and retail than in manufacturing. To explore the channels through which this relationship can arise, I estimate a structural decomposition framework building on chapter 1. I find that differences in the wage-size relationship between manufacturing and non-manufacturing sectors arise because in the latter (i) the relationship between firm size and average worker productivity, and (ii) the relationship between firm size and the firm-specific component of wages, are comparatively weaker. Worker composition explains approximately three-quarters of the wage-size relationship, while firm-specific heterogeneity explains one-quarter. Overall, my decompositions suggest rentsharing as the main driver behind the positive relationship between the firm-specific component of wages and firm size, as opposed to efficiency wage considerations.
Chapter 3 asks: why are there large differences in export performance across firms? We study the importance of firms’ geographical location within a country relative to well-known differences in firm productivity and how they are related. Using French administrative datasets on the universe of workers, firms, and trade flows, we find that exporter characteristics differ systematically by their proximity to foreign markets. To interpret these new empirical patterns, we build a trade model in which firms differ in terms of productivity and location and derive testable predictions. Our theory shows that the relative importance of domestic and international trade opportunities can shape the spatial distribution of non-exporters and exporters, and in turn, determine the size and productivity of cities.
| Item Type: | Thesis (PhD) | ||||
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| Subjects: | H Social Sciences > HD Industries. Land use. Labor H Social Sciences > HF Commerce |
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| Library of Congress Subject Headings (LCSH): | Labor market -- France, Labor market -- Regional disparities, Wages -- France, Wages and labor productivity -- France, Exports -- France | ||||
| Official Date: | July 2020 | ||||
| Dates: |
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| Institution: | University of Warwick | ||||
| Theses Department: | Department of Economics | ||||
| Thesis Type: | PhD | ||||
| Publication Status: | Unpublished | ||||
| Supervisor(s)/Advisor: | Van Rens, Thijs, 1973- ; Rathelot, Roland | ||||
| Sponsors: | Economic and Social Research Council (Great Britain) ; University of Warwick. Department of Economics | ||||
| Format of File: | |||||
| Extent: | xi, 133 leaves : illustrations | ||||
| Language: | eng |
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