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Exports and Skills: The impact of destination in a middle income country

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  • Adriana Peluffo

    () (Universidad de la República (Uruguay). Facultad de Ciencias Económicas y de Administración. Instituto de Economía)

Abstract

In this work we analyse the links between exports and its destination to high income countries on the demand for skilled labour. The theoretical literature argues that exporting to high-income countries leads to quality upgrading that is skill intensive, and which requires additional skill intensive services. We test this theory using a panel of Uruguayan manufacturing firms for the period 1997-2006 using data from the Encuesta de Actividad Economica from the Instituto Nacional de Estadisticas, which was merged with export data from the Direccion Nacional de Aduanas. Firstly, we analyse associations by means of OLS estimations. Then we use IV-GMM models to analyse causality. Our preliminary results seem to indicate that contrary to previous studies for developed and other middle income economies such as Mexico (Verhoogen 2008) and Argentina (Brambilla et al. 2012), exports to high income countries do not translate into a higher demand for skills for the Uruguayan case, while exports in general do. The explanation for these results may lie in the productive specialization of the country, characterised by sectors of low technological content, low value added and low sophistication, or as Hausmann et al. (2005) argue “what we export matters”.

Suggested Citation

  • Adriana Peluffo, 2014. "Exports and Skills: The impact of destination in a middle income country," Documentos de Trabajo (working papers) 14-04, Instituto de Economía - IECON.
  • Handle: RePEc:ulr:wpaper:dt-04-14
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    References listed on IDEAS

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    2. Christopher F Baum & Mark E. Schaffer & Steven Stillman, 2003. "Instrumental variables and GMM: Estimation and testing," Stata Journal, StataCorp LP, vol. 3(1), pages 1-31, March.
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    5. Andrew Bernard & Joachim Wagner, 1997. "Exports and success in German manufacturing," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 133(1), pages 134-157, March.
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    8. Marc J. Melitz, 2003. "The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity," Econometrica, Econometric Society, vol. 71(6), pages 1695-1725, November.
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    10. Bastos, Paulo & Silva, Joana, 2010. "The quality of a firm's exports: Where you export to matters," Journal of International Economics, Elsevier, vol. 82(2), pages 99-111, November.
    11. Christopher F Baum & Mark E. Schaffer & Steven Stillman, 2007. "Enhanced routines for instrumental variables/GMM estimation and testing," Boston College Working Papers in Economics 667, Boston College Department of Economics, revised 05 Sep 2007.
    12. Paula Bustos, 2011. "Trade Liberalization, Exports, and Technology Upgrading: Evidence on the Impact of MERCOSUR on Argentinian Firms," American Economic Review, American Economic Association, vol. 101(1), pages 304-340, February.
    13. Ricardo Hausmann & Jason Hwang & Dani Rodrik, 2007. "What you export matters," Journal of Economic Growth, Springer, vol. 12(1), pages 1-25, March.
    14. Hartmut Egger & Udo Kreickemeier, 2017. "Firm Heterogeneity and the Labor Market Effects of Trade Liberalization," World Scientific Book Chapters,in: International Trade and Labor Markets Welfare, Inequality and Unemployment, chapter 10, pages 265-306 World Scientific Publishing Co. Pte. Ltd..
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    More about this item

    Keywords

    exports; skills; wages; destinations;

    JEL classification:

    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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