Technology Trade, Productivity and Growth

International trade is a major channel for technology diffusion. However regressing trade in R&D intensive goods to evaluate the effect of technology imports on productivity in a cross section of countries may be misleading because of simultaneity bias. I identify the effect of technology trade on productivity using geographical instruments for the trade variable as in Frankel and Romer (1999). I make several contributions. First, I provide evidence that OLS estimates are downward biased. Second, the effect is robust to the exclusion of outliers, the inclusion of latitude, and to different subsamples. Finally, I document the channels throughout technology imports affect productivity.Growth, Technology Diffusion, Instrumental Variables, R&D Spillovers, Capital Goods.

Migrants, regulations, and trade

Existing evidence indicates that immigration helps to overcome informal barriers to trade, but little is known about whether this effect holds for trade frictions coming from importing countries’ regulations. This paper investigates the impact that immigration has on exporting, by using transaction-level data between all Spanish provinces and every country in the world. We present evidence that migrants (1) increase the number of shipments and (2) reduce the average value per shipment. Our main contribution is to show that the first effect is driven mostly by formal institutions, via contract enforcement procedures, and by administrative barriers to trade. We find that the second effect is independent of the importing country’s regulations. Both of these findings suggest that migration has an impact on trade beyond informal channels and imply that formal and informal institutions interact and affect trade through different margins

TRADE COSTS AND JOB FLOWS: EVIDENCE FROM ESTABLISHMENT‐LEVEL DATA

Changes in the costs of trading inputs or final goods affect establishment-level job flows. Using a longitudinal database containing the universe of manufacturing establishments in California from 1992 to 2004, we find that a decline in input or final-good trade costs is associated with job destruction in the least productive establishments, job creation in the most productive establishments, and an increase in the death likelihood of the least productive establishments. The evidence is consistent with predictions of models of trade with heterogeneous firms. Additionally, the evidence shows that the effects of input trade costs on establishment-level job flows are larger than the effects of final-good trade costs. © 2014 Western Economic Association International

TRADE COSTS AND JOB FLOWS: EVIDENCE FROM ESTABLISHMENT-LEVEL DATA

type="main" xml:id="ecin12139-abs-0001"> Changes in the costs of trading inputs or final goods affect establishment-level job flows. Using a longitudinal database containing the universe of manufacturing establishments in California from 1992 to 2004, we find that a decline in input or final-good trade costs is associated with job destruction in the least productive establishments, job creation in the most productive establishments, and an increase in the death likelihood of the least productive establishments. The evidence is consistent with predictions of models of trade with heterogeneous firms. Additionally, the evidence shows that the effects of input trade costs on establishment-level job flows are larger than the effects of final-good trade costs. (JEL F14, F16

Offshoring and jobs: The myriad channels of influence

Offshoring reallocates jobs inside firms, between firms, and across sectors, affecting the economy-wide unemployment rate. We study these channels in a model with labor market frictions and two sectors-a differentiated-good sector comprising heterogeneous firms that can offshore, and a homogeneous-good sector. A decline in offshoring costs affects intrafirm and intrasectoral reallocation of jobs in the differentiated-good sector through a selection effect, a productivity effect, and a job-relocation effect. The key parameters determining the impact of offshoring on jobs at various margins, as well as on the economy-wide unemployment rate, are the elasticity of substitution between inputs, the elasticity of substitution between varieties of differentiated goods, and the elasticity of demand for differentiated goods as a whole. Changes in search frictions affect unemployment both directly and through their interaction with offshoring. Highlights