Department of Economics
1812 Sir Issac Brock Way
St. Catharines, ON L2S 3A1
Institutional Affiliation: Brock University
Information about this author at RePEc
NBER Working Papers and Publications
|March 2018||Trade and Minimum Wages in General Equilibrium: Theory and Evidence|
with Arpita Chatterjee, Kala Krishna, Hong Ma: w24456
Do minimum wages affect economic outcomes beyond low-skill employment? This paper develops a new model with heterogeneous firms under perfect competition in a Heckscher-Ohlin setting to show that a binding minimum wage raises product prices, encourages substitution away from labor, and creates unemployment. It reduces output and exports of the labor intensive good, despite higher prices and, less obviously, selection in the labor (capital) intensive sector becomes stricter (weaker). Exploiting rich regional variation in minimum wages across Chinese prefectures and using Chinese Customs data matched with firm level production data, we find robust evidence in support of causal effects of minimum wage consistent with our theoretical predictions.
|May 2015||How You Export Matters: Export Mode, Learning and Productivity in China|
with Kala Krishna, Hong Ma: w21164
This paper shows that how firms export (directly or indirectly via intermediaries) matters. We develop and estimate a dynamic discrete choice model that allows learning-by-exporting on the cost and demand side as well as sunk/fixed costs to differ by export mode. We find that demand and productivity evolve more favorably under direct exporting, though the fixed/sunk costs of this option are higher. Our results suggest that had China not liberalized its direct trading rights when it joined the WTO, its exports and export participation would have been 30 and 37 percent lower respectively.
Published: Bai, Xue & Krishna, Kala & Ma, Hong, 2017. "How you export matters: Export mode, learning and productivity in China," Journal of International Economics, Elsevier, vol. 104(C), pages 122-137. citation courtesy of