Input quality and skills are complementary and increase output quality: Causal evidence from Ecuador’s trade liberalization - HAL-SHS - Sciences de l'Homme et de la Société Accéder directement au contenu
Article Dans Une Revue Journal of Development Economics Année : 2021

Input quality and skills are complementary and increase output quality: Causal evidence from Ecuador’s trade liberalization

Résumé

This paper tests for the production complementarity between firms’ access to high-quality intermediate inputs and their skill composition and their joint impact on output quality. Using census data at firm-product level for Ecuador for 1997–2007, we exploit exogenous tariff changes at Ecuador’s entry to the World Trade Organization to show that input tariff cuts allow firms to upgrade their input quality. Next, we demonstrate by means of within-firm instrumental variable estimations that firms’ choices of imported input quality drive their relative demand for skilled labor and the skill premium. Imported input quality and firms’ skill-composition jointly boost firms’ output quality. Moreover, we show that firms that source domestic inputs produced by industries that import high-quality inputs also upgrade their skills and output quality. Our findings are not driven by our measures of quality, foreign demand shocks (export opportunities), Ecuador’s financial crisis, real exchange rate variations, financial liberalization and other industry-level reforms.
Fichier principal
Vignette du fichier
S030438782100047X.pdf (454.34 Ko) Télécharger le fichier
Origine : Fichiers produits par l'(les) auteur(s)

Dates et versions

hal-03211405 , version 1 (09-05-2023)

Licence

Paternité - Pas d'utilisation commerciale

Identifiants

Citer

Maria Bas, Caroline Paunov. Input quality and skills are complementary and increase output quality: Causal evidence from Ecuador’s trade liberalization. Journal of Development Economics, 2021, 151, pp.102668. ⟨10.1016/j.jdeveco.2021.102668⟩. ⟨hal-03211405⟩
73 Consultations
26 Téléchargements

Altmetric

Partager

Gmail Facebook X LinkedIn More