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Journal article

O-ring production networks

Abstract:
We document strong skill matching in Turkish firms’ production networks. Additionally, in the data, export demand shocks from rich countries increase firms’ skill intensity and their trade with skill-intensive domestic partners. We explain these patterns using a quantitative model with heterogeneous firms, quality choices, and endogenous networks. A counterfactual economy-wide export demand shock of 5% leads both exporters and nonexporters to upgrade quality, raising the average wage by 1.2%. This effect is nine times the effect in a scenario without interconnected quality choices. We use the model to study the conditions for the success of export promotion policies.
Publication status:
Published
Peer review status:
Peer reviewed

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Files:
Publisher copy:
10.1086/725703

Authors


More by this author
Institution:
University of Oxford
Division:
SSD
Department:
Economics
Role:
Author


Publisher:
University of Chicago Press
Journal:
Journal of Political Economy More from this journal
Volume:
132
Issue:
1
Pages:
200-247
Publication date:
2023-11-15
Acceptance date:
2023-04-11
DOI:
EISSN:
1537-534X
ISSN:
0022-3808


Language:
English
Keywords:
Pubs id:
1339535
Local pid:
pubs:1339535
Deposit date:
2023-05-02

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