Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/207178 
Year of Publication: 
2019
Series/Report no.: 
CESifo Working Paper No. 7787
Publisher: 
Center for Economic Studies and ifo Institute (CESifo), Munich
Abstract: 
We describe a model of trade with input based product differentiation and non-proportional trade costs that is capable of predicting a positive correlation between firms’ export intensity, the price of their exports, and the wages they pay to their workers. These correlations arise in the model solely from comparative input scarcity and independently of any productivity differentials: in equilibrium, firms that employ workers with comparatively scarcer skills, other things equal, export a larger proportion of their output, pay higher wages and charge higher prices.
Subjects: 
export intensity and wages
input based product differentiation
JEL: 
F12
F16
E24
Document Type: 
Working Paper
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