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Regional manufacturing wages: dancing to the tune of trade shocks

Lage de Sousa, Filipe (2010) Regional manufacturing wages: dancing to the tune of trade shocks. SERC Discussion Papers, SERCDP0046. Spatial Economics Research Centre (SERC), London School of Economics and Political Science, London, UK.

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Identification Number: SERCDP0046

Abstract

Firms generally choose to locate their production where profits are maximized. As costs affect profits, trade-offs between two marginal costs – employees’ wages and transport costs – may be important for decisions regarding location. Wages tend to be greater in industrial centres and decrease as transport costs increase. Trade shocks might impact regional wage disparities by making foreign markets, for example, relatively more attractive for firms than domestic markets. This paper tests these two hypotheses by using regional Brazilian data. Results corroborate that regions with higher transport costs present lower wages, and that trade shocks affect these regional wage disparities.

Item Type: Monograph (Discussion Paper)
Official URL: http://www.spatialeconomics.ac.uk/SERC/publication...
Additional Information: © 2010 Filipe Lage de Sousa
Subjects: H Social Sciences > HD Industries. Land use. Labor
Sets: Research centres and groups > Spatial Economics Research Centre
Collections > Economists Online
Date Deposited: 24 Mar 2011 11:20
Last Modified: 28 Mar 2011 11:07
URI: http://eprints.lse.ac.uk/id/eprint/33500

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