Trade shocks and factor adjustment frictions: implications for investment and labor

Autores
Artuç, Erhan; Bet, German; Brambilla, María Irene; Porto, Guido
Año de publicación
2013
Idioma
inglés
Tipo de recurso
artículo
Estado
versión publicada
Descripción
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).
Fil: Artuç, Erhan. Banco Mundial; Estados Unidos
Fil: Bet, German. Northwestern University; Estados Unidos
Fil: Brambilla, María Irene. Consejo Nacional de Investigaciones Científicas y Técnicas; Argentina. Universidad Nacional de la Plata. Facultad de Cs.economicas; Argentina
Fil: Porto, Guido. Universidad Nacional de la Plata. Facultad de Cs.economicas; Argentina
Materia
Trade Shocks
Capital Adjustment Costs
Labor Mobility
Firm Heterogeneity
Invsetment
Labor Market Dynamics
Nivel de accesibilidad
acceso abierto
Condiciones de uso
https://creativecommons.org/licenses/by-nc-sa/2.5/ar/
Repositorio
CONICET Digital (CONICET)
Institución
Consejo Nacional de Investigaciones Científicas y Técnicas
OAI Identificador
oai:ri.conicet.gov.ar:11336/13592
Acceder
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network_name_str CONICET Digital (CONICET)
spelling Trade shocks and factor adjustment frictions: implications for investment and laborArtuç, ErhanBet, GermanBrambilla, María IrenePorto, GuidoTrade ShocksCapital Adjustment CostsLabor MobilityFirm HeterogeneityInvsetmentLabor Market Dynamicshttps://purl.org/becyt/ford/5.2https://purl.org/becyt/ford/5When 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).Fil: Artuç, Erhan. Banco Mundial; Estados UnidosFil: Bet, German. Northwestern University; Estados UnidosFil: Brambilla, María Irene. Consejo Nacional de Investigaciones Científicas y Técnicas; Argentina. Universidad Nacional de la Plata. Facultad de Cs.economicas; ArgentinaFil: Porto, Guido. Universidad Nacional de la Plata. Facultad de Cs.economicas; ArgentinaUniversidad Nacional de La Plata. Facultad de Ciencias Económicas. Departamento de Economía2013-12info:eu-repo/semantics/articleinfo:eu-repo/semantics/publishedVersionhttp://purl.org/coar/resource_type/c_6501info:ar-repo/semantics/articuloapplication/pdfapplication/pdfhttp://hdl.handle.net/11336/13592Artuç, Erhan; Bet, German; Brambilla, María Irene; Porto, Guido; Trade shocks and factor adjustment frictions: implications for investment and labor; Universidad Nacional de La Plata. Facultad de Ciencias Económicas. Departamento de Economía; Documentos de Trabajo; 101; 12-2013; 1-571853-3930enginfo:eu-repo/semantics/altIdentifier/url/http://www.depeco.econo.unlp.edu.ar/doctrab/doc101.pdfinfo:eu-repo/semantics/openAccesshttps://creativecommons.org/licenses/by-nc-sa/2.5/ar/reponame:CONICET Digital (CONICET)instname:Consejo Nacional de Investigaciones Científicas y Técnicas2025-09-03T09:51:28Zoai:ri.conicet.gov.ar:11336/13592instacron:CONICETInstitucionalhttp://ri.conicet.gov.ar/Organismo científico-tecnológicoNo correspondehttp://ri.conicet.gov.ar/oai/requestdasensio@conicet.gov.ar; lcarlino@conicet.gov.arArgentinaNo correspondeNo correspondeNo correspondeopendoar:34982025-09-03 09:51:28.57CONICET Digital (CONICET) - Consejo Nacional de Investigaciones Científicas y Técnicasfalse
dc.title.none.fl_str_mv Trade shocks and factor adjustment frictions: implications for investment and labor
title Trade shocks and factor adjustment frictions: implications for investment and labor
spellingShingle Trade shocks and factor adjustment frictions: implications for investment and labor
Artuç, Erhan
Trade Shocks
Capital Adjustment Costs
Labor Mobility
Firm Heterogeneity
Invsetment
Labor Market Dynamics
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
dc.creator.none.fl_str_mv Artuç, Erhan
Bet, German
Brambilla, María Irene
Porto, Guido
author Artuç, Erhan
author_facet Artuç, Erhan
Bet, German
Brambilla, María Irene
Porto, Guido
author_role author
author2 Bet, German
Brambilla, María Irene
Porto, Guido
author2_role author
author
author
dc.subject.none.fl_str_mv Trade Shocks
Capital Adjustment Costs
Labor Mobility
Firm Heterogeneity
Invsetment
Labor Market Dynamics
topic Trade Shocks
Capital Adjustment Costs
Labor Mobility
Firm Heterogeneity
Invsetment
Labor Market Dynamics
purl_subject.fl_str_mv https://purl.org/becyt/ford/5.2
https://purl.org/becyt/ford/5
dc.description.none.fl_txt_mv 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).
Fil: Artuç, Erhan. Banco Mundial; Estados Unidos
Fil: Bet, German. Northwestern University; Estados Unidos
Fil: Brambilla, María Irene. Consejo Nacional de Investigaciones Científicas y Técnicas; Argentina. Universidad Nacional de la Plata. Facultad de Cs.economicas; Argentina
Fil: Porto, Guido. Universidad Nacional de la Plata. Facultad de Cs.economicas; Argentina
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).
publishDate 2013
dc.date.none.fl_str_mv 2013-12
dc.type.none.fl_str_mv info:eu-repo/semantics/article
info:eu-repo/semantics/publishedVersion
http://purl.org/coar/resource_type/c_6501
info:ar-repo/semantics/articulo
format article
status_str publishedVersion
dc.identifier.none.fl_str_mv http://hdl.handle.net/11336/13592
Artuç, Erhan; Bet, German; Brambilla, María Irene; Porto, Guido; Trade shocks and factor adjustment frictions: implications for investment and labor; Universidad Nacional de La Plata. Facultad de Ciencias Económicas. Departamento de Economía; Documentos de Trabajo; 101; 12-2013; 1-57
1853-3930
url http://hdl.handle.net/11336/13592
identifier_str_mv Artuç, Erhan; Bet, German; Brambilla, María Irene; Porto, Guido; Trade shocks and factor adjustment frictions: implications for investment and labor; Universidad Nacional de La Plata. Facultad de Ciencias Económicas. Departamento de Economía; Documentos de Trabajo; 101; 12-2013; 1-57
1853-3930
dc.language.none.fl_str_mv eng
language eng
dc.relation.none.fl_str_mv info:eu-repo/semantics/altIdentifier/url/http://www.depeco.econo.unlp.edu.ar/doctrab/doc101.pdf
dc.rights.none.fl_str_mv info:eu-repo/semantics/openAccess
https://creativecommons.org/licenses/by-nc-sa/2.5/ar/
eu_rights_str_mv openAccess
rights_invalid_str_mv https://creativecommons.org/licenses/by-nc-sa/2.5/ar/
dc.format.none.fl_str_mv application/pdf
application/pdf
dc.publisher.none.fl_str_mv Universidad Nacional de La Plata. Facultad de Ciencias Económicas. Departamento de Economía
publisher.none.fl_str_mv Universidad Nacional de La Plata. Facultad de Ciencias Económicas. Departamento de Economía
dc.source.none.fl_str_mv reponame:CONICET Digital (CONICET)
instname:Consejo Nacional de Investigaciones Científicas y Técnicas
reponame_str CONICET Digital (CONICET)
collection CONICET Digital (CONICET)
instname_str Consejo Nacional de Investigaciones Científicas y Técnicas
repository.name.fl_str_mv CONICET Digital (CONICET) - Consejo Nacional de Investigaciones Científicas y Técnicas
repository.mail.fl_str_mv dasensio@conicet.gov.ar; lcarlino@conicet.gov.ar
_version_ 1842269095720910848
score 13.13397

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