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The Impact of Trade Liberalization on Employment, Capital, and Productivity Dynamics: Evidence from the Uruguayan Manufacturing Sector

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Author Info

  • Carlos Casacuberta
  • Gabriela Fachola
  • Néstor Gandelman

Abstract

This paper studies the impact of trade liberalization on labor and capital gross flows and productivity in the Uruguayan manufacturing sector. Uruguay opened its economy in the presence of -at least initially- strong unions and structurally different industry concentration levels. Higher international exposure implied slightly higher job creation and an important increase in job and capital destruction. Unions were able to dampen this effect. Although not associated with higher creation rates, unions were effective in reducing job and capital destruction. Industry concentration also was found to mitigate the destruction of jobs but had no effect on job creation or capital dynamics. The changes in the use of labor and capital were accompanied by an increase in total factor productivity, especially in sectors where tariff reductions were larger and unions were not present. The authors found no evidence of varying productivity dynamics across different industry concentration levels.

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Bibliographic Info

Paper provided by Inter-American Development Bank in its series IDB Publications with number 43159.

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Date of creation: Feb 2004
Date of revision:
Handle: RePEc:idb:brikps:43159

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Related research

Keywords: Productivity; Integration & Trade; Labor; Industrial productivity; employment; capital movement; Uruguay; Latin American Research Network;

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References

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Citations

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Cited by:
  1. Ligia Melo & Carlos Ballesteros, 2014. "The impact of external factors on job creation and destruction in the Colombian manufacturing sector," Lecturas de Economía, Universidad de Antioquia, Departamento de Economía, issue 81, pages 155-186, Julio - D.
  2. John Haltiwanger & Adriana Kugler & Maurice Kugler & Alejandro Micco & Carmen Pages, 2004. "Effects of tariffs and real exchange rates on job reallocation: evidence from Latin America," Journal of Economic Policy Reform, Taylor & Francis Journals, vol. 7(4), pages 191-208.
  3. Carlos Casacuberta & N�stor Gandelman, 2012. "Protection, Openness, and Factor Adjustment: Evidence from the Manufacturing Sector in Uruguay," Economic Development and Cultural Change, University of Chicago Press, vol. 60(3), pages 597 - 629.
  4. Héctor Salgado Banda & Lorenzo Bernal Verdugo, 2011. "Multifactor productivity and its determinants: an empirical analysis for Mexican manufacturing," Journal of Productivity Analysis, Springer, vol. 36(3), pages 293-308, December.
  5. repec:idb:brikps:21778 is not listed on IDEAS
  6. Mitra, Arup, 2013. "Can industry be the key to pro-poor growth? : An exploratory analysis for India," ILO Working Papers 484346, International Labour Organization.
  7. Castro, Lucio & Saslavsky, Daniel, 2008. "Trade with China and India and Manufacturing Labour Demand in Argentina," Working Paper Series UNU-WIDER Research Paper , World Institute for Development Economic Research (UNU-WIDER).

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