Labor share, foreign demand and superstar exporters

Ludovic Panon

Journal of International Economics, 2022, vol. 139, issue C

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 generate a sizable labor share decline, regardless of aggregate labor share dynamics. A simple heterogeneous-firm model with endogenous markups rationalizes my empirical results. Overall, these findings provide direct causal evidence of a “winner take most” phenomenon induced by trade globalization and emphasize the role of increased competition on international markets for labor share changes.

Keywords: Labor share; Superstar firms; Foreign demand; Monopolistic competition; Variable markups; International trade (search for similar items in EconPapers)
JEL-codes: E25 F12 F14 F61 F62 L25 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

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Related works:
Working Paper: Labor Share, Foreign Demand and Superstar Exporters (2020)
Working Paper: Labor Share, Foreign Demand and Superstar Exporters (2020)
Working Paper: Labor Share, Foreign Demand and Superstar Exporters (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:eee:inecon:v:139:y:2022:i:c:s0022199622001106

DOI: 10.1016/j.jinteco.2022.103678

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