Skip to Main content Skip to Navigation
Preprints, Working Papers, ...

Labor Share, Foreign Demand and Superstar Exporters

Abstract : This paper proposes a new determinant of labor share changes. Using micro-data on the universe of French manufacturing exporters over 1995-2007, I show that a measure of export demand growth exogenous to firm- level outcomes drives down the manufacturing labor share through two effects. First, foreign demand shocks allow low-labor share, highly internationalized “superstar” exporters to grow disproportionately more. Second, foreign demand growth decreases the labor share of exporters and this effect is stronger for larger exporters. Both effects explain 12% of the labor share decline over 1995-2000 and led to a 1.2 percentage point drop over 2000-2007. A simple model of endogenous competition with heterogeneous firms rationalizes the findings. A market size increase allows exporters to expand, which decreases their share of fixed labor cost in value-added, and increases competition on international markets. Fiercer competition favors superstar exporters, further decreasing their labor share through the fixed cost channel. Overall, these findings provide direct causal evidence of a “winner take most” phenomenon induced by trade globalization.
Document type :
Preprints, Working Papers, ...
Complete list of metadata

https://hal-sciencespo.archives-ouvertes.fr/hal-03386549
Contributor : Spire Sciences Po Institutional Repository Connect in order to contact the contributor
Submitted on : Tuesday, October 19, 2021 - 10:55:20 PM
Last modification on : Monday, March 21, 2022 - 2:50:36 PM
Long-term archiving on: : Thursday, January 20, 2022 - 8:21:43 PM

File

2020-panon-labor-share-foreign...
Publisher files allowed on an open archive

Licence


Distributed under a Creative Commons Attribution - NoDerivatives 4.0 International License

Identifiers

Citation

Ludovic Panon. Labor Share, Foreign Demand and Superstar Exporters. 2020. ⟨hal-03386549⟩

Share

Metrics

Record views

13

Files downloads

43