Speaker: Ana Cecilia Fieler is an Assistant Professor of Economics at University of Pennsylvania. More »
Abstract: Mechanisms linking international trade to technology are amplified through input-output linkages. Trade shifts production toward technologically-advanced importers and exporters and induces these firms to upgrade. Assuming that technologically-advanced goods use intensively advanced inputs, these shifts increase demand and supply of advanced inputs, thereby leading other firms to upgrade. We formalize this amplification mechanism in a model with heterogeneous firms and endogenous technology choices. We estimate the model using data on Colombian manufacturing plants before the trade liberalization and simulate a counterfactual liberalization. Domestic input linkages are key to explain the data-a widespread increase in skill intensity combined with a sharp contraction in sales.
Last Updated: Apr 21, 2016