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Competition firm size and returns to skills: evidence from currency shocks and market liberalizations

Francesco Vona () and Michele Raitano ()

Sciences Po publications from Sciences Po

Abstract: We investigate the impact of product market competition on returns to skills in Italy using a longitudinal dataset on individual working histories. This impact is identified using three exogenous shocks affecting competition: the unforeseen devaluation of the Lira in 1992, its return to a fixed exchange regime in 1996 and the market liberalisation in the utility and transport sectors in the late 1990s–early 2000s. We analyse how firm heterogeneity and shocks of different types and signs affect the impact of competition on skill premia. We find that opposite shocks have opposite effects: an increase (resp. decrease) in international competition increases (resp. decreases) skill premia. Moreover, international shocks have greater effects on medium sized firms, while domestic liberalisation shocks have greater effects on large incumbents.

Keywords: Competition; Currency shocks; Firm size; Product; Market regulation; Skill premia (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-com
Date: 2017-12
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Published in World economy, 2017, vol. 40, pp.2676-2703

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Related works:
Journal Article: Competition, firm size and returns to skills: Evidence from currency shocks and market liberalisations (2017) Downloads
Working Paper: Competition, firm size and returns to skills: evidence from currency shocks and market liberalizations (2014) Downloads
Working Paper: Competition, firm Size and returns to skills: evidence from currency shocks and market liberalization (2014) Downloads
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