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Input quality and skills are complementary and increase output quality: Causal evidence from Ecuador’s trade liberalization
Journal of Development Economics ( IF 5.1 ) Pub Date : 2021-04-20 , DOI: 10.1016/j.jdeveco.2021.102668
Maria Bas , Caroline Paunov

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.



中文翻译:

投入的质量和技能是相辅相成的,可以提高产出的质量:厄瓜多尔贸易自由化的因果证据

本文测试了企业获得高质量中间投入及其技能构成及其对产出质量的共同影响之间的生产互补性。利用1997-2007年厄瓜多尔企业产品一级的普查数据,我们利用厄瓜多尔加入世界贸易组织时的外在关税变化来表明,削减输入关税可以使企业提高其输入质量。接下来,我们通过公司内部工具变量估计来证明,企业对进口投入质量的选择驱动了他们对熟练劳动力和技能溢价的相对需求。进口的投入质量和企业的技能构成共同提高了企业的产出质量。此外,我们表明,采购进口高质量原材料的行业生产的国内原材料的公司也会提高其技能和产出质量。

更新日期:2021-04-27
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