Three essays on the effects of international trade
The first essay examines the effects of intensified international competition on industry profits in the European Community. Two empirical methods are used. The first method utilizes traditional techniques that relate industry price-cost margins to import and export penetration ratios using an instr...
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| Format: | Electronic |
| Language: | Undetermined |
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1995.
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| Online Access: | Access restricted to UM users and campus guests: Access to the ProQuest dissertations & theses online version restricted; authentication may be required: |
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| Summary: | The first essay examines the effects of intensified international competition on industry profits in the European Community. Two empirical methods are used. The first method utilizes traditional techniques that relate industry price-cost margins to import and export penetration ratios using an instrumental variables estimation strategy. The second method examines the effects of changes in import and export penetration ratios on direct estimates of industry markups of price over marginal cost obtained a la Hall (1990). The main findings for the 1970-1990 period are: strong evidence of import discipline; weaker evidence of export discipline; inconclusive evidence that product differentiation affects the strength of trade discipline and inconclusive evidence that the strength of trade discipline varies by the origin of trade. The second essay tests a modified version of the Heckscher-Ohlin-Vanek Theorem that permits international technology differences. I develop a relationship that predicts relative factor contents of trade between any two countries in terms of relative differences in endowments and relative differences in technology between the countries. There is a significant improvement in the ability of the theory to predict trade flows in contrast to evidence from traditional tests regardless of the presence of trade restrictions. The essay illustrates that since countries have different technologies measures of factor contents of trade in final goods using direct and domestically produced indirect input requirements are more accurate and yield more consistent predictions than traditional measures of factor contents of trade using total input requirements. The third essay investigates the influence of changing import and export prices on sectoral employment and wages in the U.S. for the 1980-1990 period. Increases in import and export prices are expected to raise employment and wage levels. Higher prices for imports will raise demand for the domestically produced substitutes. Also, higher prices for exports should stimulate more production and raise employment and wage levels. The essay reveals that changes in trade prices mainly affect the level of production employment and have a smaller effect on wages. Also, the essay illustrates that estimating purely price-dependent employment and wage regressions are vulnerable to many criticisms. |
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| Item Description: | Digitized from microform version. |
| Bibliography: | Includes bibliographical references. |