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

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  • Caroline Paunov

Abstract

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.

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File URL: http://dx.doi.org/10.1787/5kg0ll7q0fvg-en
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Bibliographic Info

Paper provided by OECD Publishing in its series OECD Science, Technology and Industry Working Papers with number 2011/5.

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Date of creation: 19 Dec 2011
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Handle: RePEc:oec:stiaaa:2011/5-en

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Keywords: imports; employment; Ecuador; intermediate inputs; economic crisis; multi-product firms; product innovation; product scope; input production costs;

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