OECD Science, Technology and Industry Working Papers

1815-1965 (online)
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The OECD Directorate for Science, Technology and Innovation (STI) leads OECD research on the contribution of science, technology and industry to well-being and economic growth. STI Working Papers cover a broad range of topics including definition and measurement of science and technology indicators, global value chains, and research on policies to promote innovation. These technical or analytical working papers are prepared by staff or outside consultants to share early insights and elicit feedback.

Imports, Innovation and Employment after Crisis

Evidence from a Developing Country You or your institution have access to this content

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Caroline Paunov1
Author Affiliations
  • 1: OECD, France

19 Dec 2011
Bibliographic information

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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.
imports, economic crisis, Ecuador, intermediate inputs, product scope, multi-product firms, product innovation, employment, input production costs
JEL Classification:
  • D22: Microeconomics / Production and Organizations / Firm Behavior: Empirical Analysis
  • F16: International Economics / Trade / Trade and Labor Market Interactions
  • L6: Industrial Organization / Industry Studies: Manufacturing
  • O12: Economic Development, Innovation, Technological Change, and Growth / Economic Development / Microeconomic Analyses of Economic Development
  • O30: Economic Development, Innovation, Technological Change, and Growth / Innovation ; Research and Development ; Technological Change ; Intellectual Property Rights / General
  • O54: Economic Development, Innovation, Technological Change, and Growth / Economywide Country Studies / Latin America ; Caribbean
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