Monday, January 22nd 2018 – 13:00 – 14:00
Maison des Sciences Économiques, Room S/3
Maison des Sciences Économiques, 106-112 bd de l’Hôpital, 75013 Paris, Métro 5 Campo Formio, bus 57, 67, 27, 83 ou 47
with Caroline Paunov (OECD)
Abstract: Does input-trade liberalization foster firm product innovation and employment size? Using detailed firm-product level data for Ecuador, we exploit the unilateral trade liberalization episode when the country entered the World Trade Organisation in 1996 to identify the causal effect of exogenous input tariff changes on the product scope and employment size of importing firms. We show that access to high-quality important inputs led importers to expand the number of products. The producers of new products and importers of foreign inputs also increased their employment size. Our findings show that input-trade liberalization, through the quality-upgrading channel, resulted in skill-biased production processes.