Foreign and Domestic Firms: Long Run Employment Effects of Export Opportunities

Brian McCaig, Nina Pavcnik and Woan Foong Wong

No 10168, CESifo Working Paper Series from CESifo

Abstract: We investigate a low-income country’s long run employment response to new export opportunities. The U.S.–Vietnam Bilateral Trade Agreement reduced U.S. import tariffs on exports from Vietnam. Employment grew faster in the industries most exposed to the U.S. tariff reductions and this was driven by foreign affiliates of multinationals entering Vietnam. Foreign entrants continue to expand employment long after entry–even after 16 years. Most foreign entrants are exporters and from East Asia, highlighting that opportunities created by bilateral agreements are not just limited to signing parties. Vietnam’s subsequent capacity growth allows it to export to other markets over time.

Keywords: trade liberalization; employment; foreign direct investment; exporting; firm dynamics; Vietnam (search for similar items in EconPapers)
JEL-codes: F13 F14 O14 O19 (search for similar items in EconPapers)
Date: 2022
New Economics Papers: this item is included in nep-int and nep-sea
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Citations: View citations in EconPapers (5)

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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_10168

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