MINING SURPLUS: MODELING JAMES A. SCHMITZ'S LINK BETWEEN COMPETITION AND PRODUCTIVITY

Jeremy Greenwood, David Weiss

Research output: Contribution to journalArticlepeer-review

Abstract

James A. Schmitz documents, in a well-known case study (Journal of Political Economy 113 (2005), 582–625), a dramatic rise in productivity in the American and Canadian iron-ore industry following an increase in competition from Brazil. Prior to the increased competition, the industry was not competitive. Economic profits were divided between business and unions. Schmitz attributes the increase in productivity to a change in work practices in the industry, as old negotiated union work rules were abandoned or modified. This research formalizes a mechanism through which a rise in competition can lead to increased productivity in the iron-ore industry.

Original languageEnglish
Pages (from-to)1015-1034
Number of pages20
JournalInternational Economic Review
Volume59
Issue number3
DOIs
StatePublished - Aug 2018

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