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Journal article
From selling goods to selling services: Firm responses to trade liberalization
Holger Breinlich, Anson Soderbery and Greg C. Wright November 2018
Paper No' :

JEL Classification: D22, F13, F14, L16, L60, L80

Tags: services trade; trade liberalization

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.