Foreign Competition and Wage Inequality.

Journal article

The author argues that increased foreign competition can affect technical choice and skill differentials even when actual imports do not rise significantly. A model is presented of general oligopolistic equilibrium (GOLE) in which a reduction in import barriers (whether technological or policy-imposed) encourages more strategic investment by incumbent firms. The predictions accord with many of the stylized facts: higher skill premia; higher ratios of skilled to unskilled workers employed in all sectors and throughout the economy; little change in import volumes or prices; and rapid technological progress with rather little change in total factor productivity.

Authors: Neary, J

• Publisher: Blackwell Publishing
• Journal: Review of International Economics
• Volume: 10
• Issue: 4
• Pages: 680 - 693
• Publication date: 2002-01-01
• DOI: 10.1111/1467-9396.00358
• ISSN: 0965-7576
• Language: English