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From selling goods to selling services: firm responses to trade liberalization

Breinlich, Holger, Soderbery, Anson and Wright, Greg C. (2014) From selling goods to selling services: firm responses to trade liberalization. CEP Discussion Papers (CEPDP1303). Centre for Economic Performance, London School of Economics and Political Science, London, UK.

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Abstract

In the face of trade liberalization domestic firms are often forced out of the market, whereas others adapt and survive. In this paper we focus on a new channel of adaptation, namely the shift toward increased provision of services in lieu of goods production. We exploit variation in EU trade policy to show that lower manufacturing tariffs cause firms to shift into services provision and out of goods production. Additionally, we find that a successful transition is strongly associated with higher firm-level R&D stocks whereas higher physical capital stocks slow the shift into services provision.

Item Type: Monograph (Discussion Paper)
Official URL: http://cep.lse.ac.uk/_new/publications/series.asp?...
Additional Information: © 2014 The Authors
Divisions: Centre for Economic Performance
Subjects: H Social Sciences > HD Industries. Land use. Labor
JEL classification: F - International Economics > F1 - Trade > F12 - Models of Trade with Imperfect Competition and Scale Economies
F - International Economics > F1 - Trade > F15 - Economic Integration
F - International Economics > F2 - International Factor Movements and International Business > F23 - Multinational Firms; International Business
Sets: Research centres and groups > Centre for Economic Performance (CEP)
Date Deposited: 16 Dec 2014 12:27
Last Modified: 20 Dec 2019 00:49
Funders: Economic and Social Research Council
URI: http://eprints.lse.ac.uk/id/eprint/60523

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