The Impact of New Free Trade Agreements on Incumbent Firms and Workers

Harald Dale-Olsen ()
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Harald Dale-Olsen: Institute for Social Research, Oslo

No 16649, IZA Discussion Papers from Institute of Labor Economics (IZA)

Abstract: Trade policies might affect firms' market power and their ability to reap product-market mark-ups. Thus, potentially they influence not only firms' economic performance, but also worker pay. Utilising panel-data on Norwegian Manufacturing exporters from 2005-18 and multi-product production function-estimation techniques and recent development within the literature on dynamic treatment effects in event studies with heterogeneous treatment effects, we show that free-trade agreements increase exports and return-on-assets for Norwegian incumbent exporters, but their mark-ups decline. On average, workers in these established firms benefit from free-trade agreements, but this depends on occupations, union strength and labour market tightness.

Keywords: free-trade agreements; price-cost markups; profits; wages; multiproduct-function-estimation; dynamic treatment effects (search for similar items in EconPapers)
JEL-codes: D24 F14 J31 J42 L11 (search for similar items in EconPapers)
Pages: 40 pages
Date: 2023-12
New Economics Papers: this item is included in nep-com, nep-int and nep-lma
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