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Globalisation, productivity growth, and labour compensation

Christian Dreger (), Marius Fourné and Oliver Holtemöller

No 7/2022, IWH Discussion Papers from Halle Institute for Economic Research (IWH)

Abstract: Since the onset of globalisation, production activities have become increasingly fragmented and organised in global value chains (GVC). These networks facilitate trade in intermediaries across industrial sectors and countries and change the conditions for policies to respond to shocks. In this paper, we contribute to the understanding of the effects of GVC on productivity and labour shares in advanced and emerging economies. As indicators for globalisation we use the foreign share in intermediate inputs and the foreign share in value added, extracted from international input output tables. Estimates based on local projections reveal a positive relationship between globalisation and productivity. Moreover, we are able to reject the hypothesis that a higher degree of international integration in country-industry pairs is negatively associated with the change in the labour share for advanced countries.

Keywords: global value chains; globalisation; international trade integration; labour share; productivity (search for similar items in EconPapers)
JEL-codes: F4 F6 J3 (search for similar items in EconPapers)
Date: 2022
New Economics Papers: this item is included in nep-eff, nep-int, nep-opm and nep-tid
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:iwhdps:72022

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