International trade, non-trading firms and their impact on labour productivity

Millard, S; Nicolae, A.; Nower, M.

International trade, non-trading firms and their impact on labour productivity

Millard, S; Nicolae, A.; Nower, M.

Authors

S Millard

Dr Anamaria Nicolae anamaria.nicolae@durham.ac.uk
Associate Professor

Dr Michael Nower michael.nower@durham.ac.uk
Assistant Professor

Abstract

In this paper we examine the impact of non-trading firms on labour productivity and its persistence in response to macroeconomic shocks, through their entry and exit into the domestic market, in a model with monopolistic competition and heterogeneous firms. We quantify the effects of various macroeconomic shocks on labour productivity and we demonstrate that non-trading domestic firms’ entry and exit into the domestic market explains the persistence of labour productivity in response to transitory shocks. We also show that the model successfully replicates the sluggish recovery of labour productivity in the United Kingdom since the Great Recession.

Citation

Millard, S., Nicolae, A., & Nower, M. (2019). International trade, non-trading firms and their impact on labour productivity

Acceptance Date	Apr 15, 2019
Online Publication Date	Apr 15, 2019
Publication Date	Apr 15, 2019
Deposit Date	May 1, 2019
Publicly Available Date	May 7, 2019
Series Title	Bank of England working paper
Public URL	https://durham-repository.worktribe.com/output/1168808
Publisher URL	https://www.bankofengland.co.uk/working-paper/2019/international-trade-non-trading-firms-and-their-impact-on-labour-productivity