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Beefing Up the Service Sector: Commodity Export Booms and Production Network Spillovers

Author

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  • Amodio, Francesco

    (McGill University)

  • Chiovelli, Giorgio

    (Universidad de Montevideo)

  • Frache, Serafin

    (Universidad de Montevideo)

Abstract

We show that commodity export booms can propagate up the value chain, reshape production networks, and drive growth and transformation in the service sector. We study Uruguay’s beef export boom to China in the 2010s, combining customs, firm-to-firm transactions, employer-employee, and balance sheet data. Domestic suppliers to beef exporters that expanded trade with China recorded higher sales, especially in services, with associated gains in employment, wages, and sales per worker, along with increased imports of high-quality products. Aggregate sales in the economy rose by 1.79%, with each export dollar generating 46 more cents in domestic sales, including 10 cents in services. Over time, service firms reoriented their connections toward beef exporters, amplifying their gains from trade.

Suggested Citation

  • Amodio, Francesco & Chiovelli, Giorgio & Frache, Serafin, 2026. "Beefing Up the Service Sector: Commodity Export Booms and Production Network Spillovers," IZA Discussion Papers 18703, IZA Network @ LISER.
    • Handle: RePEc:iza:izadps:dp18703
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    Keywords

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    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O54 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Latin America; Caribbean

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