scholarly journals International Trade and Human Capital Investment with Heterogeneous Firms and Workers: Modeling and Analysis

Mathematics ◽  
2021 ◽  
Vol 9 (10) ◽  
pp. 1106
Author(s):  
Jaewon Jung
Keyword(s):  
Human Capital ◽  
International Trade ◽  
Organizational Behavior ◽  
Capital Accumulation ◽  
Global Economy ◽  
Capital Investment ◽  
Investment Decision ◽  
Heterogeneous Firms ◽  
Modeling And Analysis ◽  
Trade Model

Though the importance of organizational behavior and human decision processes within firms for the firm performance has largely been recognized in the business and management literature, much less attention has been devoted to studying such implications in the international trade context. This paper develops a general-equilibrium trade model in which heterogeneous workers make an investment decision in acquiring advanced managerial skills and choose their optimal effort level based on their comparative advantage. In doing so, we show how globalization-induced human capital accumulation within firms leads to sustainable economic growth. We also show that workers’ organizational belief and CEO’s managerial vision may be an important element for the human capital formation within firms and for the performance of firms in a global economy.

scholarly journals Optimal taxation with unobservable investment in human capital

2019 ◽  
Vol 72 (2) ◽  
pp. 501-516 ◽  
Author(s):  
Catarina Reis
Keyword(s):  
Human Capital ◽  
Capital Accumulation ◽  
Optimal Taxation ◽  
Capital Investment ◽  
Physical Capital ◽  
Income Taxes ◽  
Long Run ◽  
Positive Rate ◽  
The Government ◽  
Physical Capital Accumulation

Abstract In a Ramsey model of optimal taxation, if human capital investment can be observed separately from consumption, it is optimal not to distort human or physical capital accumulation in the long run, and only labour income taxes should be used. However, in reality the government can’t always distinguish between investment in human capital and pure consumption, so a tax on labour or consumption will necessarily tax human capital. We find that when investment in human capital is unobservable, the optimal policy is to tax human capital at a positive rate, even in the long run. Whether physical capital should be taxed or not depends on its degree of complementarity with human capital versus labour.

scholarly journals Population and Economic Growth Under Different Growth Engines

2017 ◽  
Vol 18 (2) ◽  
pp. 182-211 ◽  
Author(s):  
Alberto Bucci ◽  
Xavier Raurich
Keyword(s):  
Economic Growth ◽  
Growth Rate ◽  
Human Capital ◽  
Population Growth ◽  
Capital Accumulation ◽  
Capital Investment ◽  
Human Capital Investment ◽  
Physical Capital ◽  
Long Run

Abstract Using a growth model with physical capital accumulation, human capital investment and horizontal R&D activity, this paper proposes an alternative channel through which an increase in the population growth rate may yield a non-uniform (i.e., a positive, negative, or neutral) impact on the long-run growth rate of per-capita GDP, as available empirical evidence seems mostly to suggest. The proposed mechanism relies on the nature of the process of economic growth (whether it is fully or semi-endogenous), and the peculiar engine(s) driving economic growth (human capital investment, R&D activity, or both). The model also explains why in the long term the association between population growth and productivity growth may ultimately be negative when R&D is an engine of economic growth.

scholarly journals The Phenomenon of Population Aging: Major Economic Effects (Ending)

2019 ◽  
Vol 14 (3) ◽  
pp. 8-53
Keyword(s):  
Capital Accumulation ◽  
Global Economy ◽  
Capital Investment ◽  
Population Aging ◽  
Capital Intensity ◽  
The Elderly ◽  
Economic Effects ◽  
Economic Consequences ◽  
Long Run ◽  
Pension Age

Today most countries are experiencing fast population aging, which is going to last the entire 21st century. Its economic effects are multifarious and will in large part shape further dynamics of the global economy not only in the short or medium but also in the long run. Unfortunately, Russian economists and politicians are hardly aware of how diverse economic consequences of population aging are since their attention is focused on its narrow, purely pragmatic, dimensions (such as the raising of pension age, the deficit of the Russian Pension Fund etc.). The paper provides a broad overview of major economic effects of population aging from both theoretical and empirical perspectives. It examines the place of aging in the process of demographic transition, and forecasts its expected trends in subsequent decades for a few countries including Russia. Next, it critically reviews different versions of dependency/support ratios: demographic and economic; chronological and prospective; non-adjusted and adjusted for differences by age in labor income and per capita consumption. Special attention is paid to a basic scheme of relationships between key demographic and macroeconomic variables that highlights how population aging might affect employment, labor productivity, capital intensity, wages, returns to capital, investment and savings. Some additional effects are also analyzed, such as prospective changes in labor supply, human capital accumulation, technological change, real interest, and inflation. A general conclusion is that population aging is not per se a fundamental economic challenge that should endanger society’s welfare. Real dangers arise from existing institutions providing support for the elderly, which were established in the early to mid 20th century under completely different demographic and economic conditions.

scholarly journals Corruption, Public Expenditure and Human Capital Accumulation

2016 ◽  
Vol 8 (1) ◽  
pp. 17-45
Author(s):  
Spyridon Boikos
Keyword(s):  
Human Capital ◽  
Capital Accumulation ◽  
Capital Investment ◽  
Public Expenditure ◽  
Parametric Method ◽  
Physical Capital ◽  
Human Capital Accumulation ◽  
Linear Effect ◽  
The Public ◽  
The Impact

This paper investigates the possible non-linear effect of corruption on human capital accumulation through two channels. The first channel is through the effect of corruption on the public expenditure on education and the second channel is through the effect of corruption on the physical capital investment. Initially, we construct an endogenous two-sector growth model with human capital accumulation and we try to explore the impact of corruption on the allocation of public expenditure and therefore on the distribution of human capital across sectors. Then by using a semi-parametric method, we confirm the presence of non-linearities between human capital and corruption.

scholarly journals GLOBAL DEVELOPMENT, TRADE, HUMAN CAPITAL, AND BUSINESS CYCLES

2020 ◽  
Vol 5 (Special) ◽  
pp. 9-29
Author(s):  
Wei-Bin Zhang
Keyword(s):  
Human Capital ◽  
Growth Model ◽  
Capital Accumulation ◽  
Equilibrium Points ◽  
Human Capital Accumulation ◽  
Learning Abilities ◽  
Exogenous Shocks ◽  
Trade Model ◽  
Comprehensive Framework ◽  
National Economies

This paper generalizes the multi-country growth model with capital accumulation, human capital accumulation, economic structure and international trade by Zhang (2014) by making all the time-independent parameters in Zhang’s model as time-dependent parameters. Each national economy consists of one tradable, one non-tradable and one education sector. National economies are different in propensities to save, to obtain education and to consume, and in learning abilities. The model integrates the Solow growth model, the Uzawa two-sector growth model, the Uzawa-Lucas two-sector growth model, and the Oniki–Uzawa trade model within a comprehensive framework. Human capital accumulation is through education in the Uzawa-Lucas model, Arrow’s learning by producing, and Zhang’s learning by consuming (creative learning). The behavior of the household is described with an alternative approach to household behavior. We simulated the model to demonstrate existence of equilibrium points, motion of the dynamic system, and oscillations due to different exogenous shocks.

Demographic Changes and the Gains from Globalisation: An Analysis of Ageing, Capital Flows, and International Trade

2010 ◽  
Vol 10 (3) ◽  
pp. 1850201 ◽  
Author(s):  
Marcel Mérette ◽  
Patrick Georges
Keyword(s):  
International Trade ◽  
Capital Flows ◽  
Capital Accumulation ◽  
Global Economy ◽  
Demographic Changes ◽  
Demographic Projections ◽  
Real Gdp ◽  
The World ◽  
Real Gdp Per Capita ◽  
Per Capita

This paper develops a multi-country overlapping-generations general equilibrium model to gauge the economic impact of demographic changes in the global economy and its transmission effects on different countries. Although severe demographic pressures contribute to significantly lower real GDP per capita across several regions in the world, globalisation through international trade generates an intertemporal gain from trade and a long-lasting improvement in the terms of trade of older OECD countries, which sustains their real consumption per capita (when goods from different geographical origins are assumed to be imperfectly substitutable), while globalisation through capital flows stimulates capital accumulation and growth in younger countries such as India and various parts of the rest of the world. The paper also illustrates that the very distinct demographic projections for China and India might, ceteris paribus, lead to striking divergences in their economic fortune.

The effect of comparative advantage of host country’s industry on multinationals’ M&A vs greenfield FDI decisions

2016 ◽  
Vol 20 (3) ◽  
pp. 229-258 ◽  
Author(s):  
Jaeho Lee ◽  
Yong Joon Jang
Keyword(s):  
Comparative Advantage ◽  
Investment Decision ◽  
Heterogeneous Firms ◽  
Entry Mode ◽  
Foreign Market ◽  
Firm Level ◽  
Data Set ◽  
Content Type ◽  
Trade Model ◽  
Comparative Advantages

Purpose The purpose of this paper is to argue that comparative advantage of host country’s industry can be one of the significant determinants of the decision on mergers and acquisitions (M&A) or greenfield in foreign direct investment (FDI). Design/methodology/approach The authors extract five-related properties of an industry with comparative advantage in a host nation from Bernard et al.’s (2007) international trade model with heterogeneous firms and attempt to empirically test their roles in a multinational enterprise’s (MNE) M&A or greenfield investment decision, using the inward FDI data set in Korea from 1999 to 2006. Findings The theoretical framework finds that the five properties derived from an industry with comparative advantage in a host country have mixed motives for M&A or greenfield. The empirical results show that selected conventional independent variables generally affect the M&A or greenfield entry mode decision with significance individually and that their impacts become more or less prominent when the authors employ interaction terms combining them with comparative advantages in the industries. Research limitations/implications This implies that MNEs not only consider their own firm-specific advantages or other country-level factors for foreign market entries as the previous research generally found, but also seriously take into account industry-specific factors, especially industry-wide comparative advantages based on heterogeneous productivities of firms. Originality/value This paper reconciles multinationals’ strategic motives under an oligopolistic market with their efficiency gains under a monopolistic competitive market, which are considered as two main factors for cross-border M&A. Furthermore, this paper adds a new firm-level data set into entry mode research.

scholarly journals TECHNOLOGY, TRADE, AND GROWTH: THE ROLE OF EDUCATION

2015 ◽  
Vol 20 (5) ◽  
pp. 1381-1394 ◽  
Author(s):  
Klaus Prettner ◽  
Holger Strulik
Keyword(s):  
Human Capital ◽  
Capital Accumulation ◽  
Trade Openness ◽  
Industrialized Countries ◽  
Economic Prosperity ◽  
Trade Model ◽  
Cross Country ◽  
Globalized World ◽  
Trade And Growth

We generalize a trade model with firm-specific heterogeneity and R&D-based growth to allow for endogenous education and fertility. The framework is able to explain cross-country differences in living standards and trade intensities by the differential pace of human capital accumulation among industrialized countries. Consistent with the empirical evidence, scale matters for relative economic prosperity as long as countries are closed, whereas scale does not matter in a fully globalized world. The average human capital of a country, by contrast, influences its relative economic prosperity irrespective of trade-openness.

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