Globalisation and wage differentials: a spatial analysis

B. Fingleton, M. C. Baddeley

Research output: Contribution to journalArticle

1 Citation (Scopus)

Abstract

Fujita, Krugman and Venables (FKV) develop a model in which international wage differentials encourage industrial mobility. We argue that globalization has another important dimension. Shocks may originate in a single country but, with modern transportation and telecommunications media, shocks spread quickly and with multiple shocks complex spillovers will be generated. We assess these forces in an analysis of international wage convergence, identifying a non-linear relationship and showing that not all countries converge. Given that the FKV model omits many of the causes of non-convergence, our evidence further demonstrates that the FKV model could usefully be extended.
Original languageEnglish
Pages (from-to)1018-1034
Number of pages17
JournalManchester School
Volume79
Issue number5
DOIs
Publication statusPublished - Sep 2011

Keywords

  • spillovers
  • wage differentials

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