Topic
Factor price
About: Factor price is a research topic. Over the lifetime, 2764 publications have been published within this topic receiving 86176 citations.
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TL;DR: The authors empirically examined the effects of different types of FDI into and out of the United Kingdom on domestic productivity and on the demand for skilled and unskilled labour at the industry level.
Abstract: We relate the technological and factor price determinants of inward and outward FDI to its potential productivity and labour market effects on both host and home economies. This allows us to distinguish clearly between technology sourcing and technology exploiting FDI, and to identify FDI which is linked to labour cost differentials. We then empirically examine the effects of different types of FDI into and out of the United Kingdom on domestic (i.e. UK) productivity and on the demand for skilled and unskilled labour at the industry level. Inward investment into the UK comes overwhelmingly from sectors and countries which have a technological advantage over the corresponding UK sector. Outward FDI shows a quite different pattern, dominated by investment into foreign sectors which have lower unit labour costs than the UK. We find that different types of FDI have markedly different productivity and labour demand effects, which may in part explain the lack of consensus in the empirical literature on the effects of FDI. Our results also highlight the difficulty for policy makers of simultaneously improving employment and domestic productivity through FDI.
35 citations
TL;DR: In this paper, a theoretical discussion confirms that the anticipation of future price increases dampens the current rate of demand increases and implies demand reductions prior to the actual price increase, and the empirical application (transport sector) indicates that expectations (of another price increase in the future) may explain only a small fraction of the observed asymmetrical demand behaviour.
35 citations
Posted Content•
TL;DR: In this article, the authors explore the contribution of price rigidity, within the framework of a full-blown SDGE model, to explain the dynamics of these variables, and find that price-rigidity greatly improves the empirical performance of the model, making it capable of reproducing second moments of the data, in particular those related to the vacancy rate and market tightness.
Abstract: The successful matching model developed by Mortensen and Pissarides seems to find its hardest task in explaining the cyclical movements of some key labor market variables such as the vacancy rate and the vacancy-unemployment ratio. Several authors have discussed mechanisms compatible with the matching technology that are able to deliver the kind of correlations observed in the data. In this paper we explore the contribution of price rigidity, within the framework of a full-blown SDGE model, to explain the dynamics of these variables. We find that price rigidity greatly improves the empirical performance of the model, making it capable of reproducing second moments of the data, in particular those related to the vacancy rate and market tightness. Other realistic features of these models, such as intertemporal substitution, endogenous match destruction and capital accumulation, do not seem to play a relevant role in a flexible price setting.
35 citations
01 Jan 1998
TL;DR: The experience of decline in real wages of unskilled workers during the 1980s in the United States, and the increase in their unemployment in Europe (due to the comparative inflexibility of their labour markets vis-a-vis those of the USA) has prompted a search for possible explanations as mentioned in this paper.
Abstract: The experience of decline in the real wages of unskilled workers during the 1980s in the United States, and the increase in their unemployment in Europe (due to the comparative inflexibility of their labour markets vis-a-vis those of the United States),1 has prompted a search for possible explanations. This search has become more acute with evidence that the adverse trend for the unskilled has not so far been mitigated during the 1990s.
35 citations
TL;DR: In this paper, the authors show that the wide variety of labor factor prices implicitly assumed is in fact a reflection of a variegated labor market and that a wide range of financial capital costs is a reflection on incomplete specification of funds' costs.
35 citations