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From Selling Goods to Selling Services: Firm Responses to Trade Liberalization

Year: 2018

Type: article

Abstract: In this paper, we focus on a new channel of adaptation to trade liberalization, namely the shift toward increased provision of services in lieu of goods production. We exploit variation in European Union trade policy to show that lower manufacturing tariffs lead firms to shift into services provision and out of goods production. We also find that a successful transition is associated with higher firm-level R&D stocks. (JEL D22, F13, F14, L16, L60, L80)

Source: American Economic Journal Economic Policy

DOI: 10.1257/pol.20150116

Authors: Holger Breinlich, Anson Soderbery, Greg C. Wright

Institutions: University of Surrey, Purdue University West Lafayette, University of California, Merced

Language: English

Topic: Global trade and economics

Subfield: General Economics, Econometrics and Finance

Field: Economics, Econometrics and Finance

Domain: Social Sciences

SDG: Decent work and economic growth

Open Access status: bronze

Funder: Economic and Social Research Council