Manuel Gracia Santos, Miguel Montanyá, María J. Paz
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Decomposition and Dynamics of Unit Labor Costs in a Context of International Fragmentation of Production: Evidence from the German Automotive Sector
Conventional analysis has sought to explain the determinants of price competitiveness by way of national factors, but given the current degree of international fragmentation of production, a more holistic perspective needs to be explored. This document develops a specific proposal that permits the indicator on vertically integrated unit labor costs (VIULCs) to be broken down into its fundamental components; also, the evolution of this indicator is explored for the German automotive sector, to determine which component might best elucidate the evolution of the VIULCs. The results show a decrease in VIULCs deriving from the German sector as well as from its suppliers, confirming the relevant effects of outsourcing and offshoring strategies. Moreover, wage restraint among suppliers coupled with productivity gains are found to explain the overall reduction in VIULCs.JEL classification: P16, F15, F23,
期刊介绍:
The Review of Radical Political Economics (RRPE) promotes critical inquiry into all areas of economic, social, and political reality. As the journal of the Union for Radical Political Economics, RRPE publishes innovative research in political economy broadly defined including, but not confined to, Marxian economies, post-Keynesian economics, Sraffian economics, feminist economics, and radical institutional economics. We are actively seeking submissions concerned with policy, history of thought, and economics and the environment. RRPE reflects an interdisciplinary approach to the study, development, and application of radical political economic analysis to social problems.