Foreign trade and innovation in domestic labor relations |
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| Institution: | 1. Department of Economics, Pennsylvania State University, United States;2. Institute of China''s Economic Reform and Development, Renmin University of China, China;3. School of Economics, Renmin University of China, China;1. University of California – Berkeley, Department of Economics, Berkeley, CA 94720-3880, United States;2. Columbia University, 420 West 118th Street, School of International and Public Affairs, New York, NY 10027, United States;3. CERGE-EI, Politických vězň? 936/7, 110 00 Nové Město, Prague, Czechia;4. Ross School of Business and Ford School of Public Policy, University of Michigan, Ann Arbor, MI 48109, United States |
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| Abstract: | For the most part, neoclassical trade theory has restricted its concerns to the effect that trade has on the production and distribution of commodities. It implicitly assumes that international trade leaves unchanged the institutional structure of domestic economies.The empirical evidence presented here supports the claim that international trade induces innovation in the institutions regulating the capital-labor relationship. Existing trade theories, neoclassical or otherwise, that assume away such changes give only a partial answer to one of the central questions a theory of trade must answer: What are the effects of trade, and are these effects beneficial? |
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