Imports, Innovation and Employment after Crisis Evidence from a Developing Country

Imports are often perceived as a threat to employment. However, access to imported intermediate inputs can be essential to stimulate innovation and generate employment. We investigate this question based on a unique dataset of Ecuadorian manufacturing firms, their final products and intermediate inp...

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Bibliographic Details
Main Author: Paunov, Caroline
Format: eBook
Language:English
Published: Paris OECD Publishing 2011
Series:OECD Science, Technology and Industry Working Papers
Subjects:
Online Access:
Collection: OECD Books and Papers - Collection details see MPG.ReNa
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520 |a Imports are often perceived as a threat to employment. However, access to imported intermediate inputs can be essential to stimulate innovation and generate employment. We investigate this question based on a unique dataset of Ecuadorian manufacturing firms, their final products and intermediate inputs. Using fixed effects instrumental variable estimation we find that firms' importing activities lead to product innovation, increase firms' product scope, reduce production costs and create employment. These impacts arise not only for producers in high-tech industries but also for firms in more traditional sectors. Employment effects are much stronger several years after the country's economic crisis