Skilled Immigration and Firm-Level Upgrading as Exports Boosters in a Developing Country

Carlo Lombardo and Leonardo Peñaloza-Pacheco

No 11645, CESifo Working Paper Series from CESifo

Abstract: We examine firm-level upgrading in Colombian manufacturing firms as a result of a high-skilled labor supply shock triggered by the Venezuelan exodus. Using a unique and confidential dataset from 2013 to 2019 and a shift-share instrumental variables approach, we find that the increased supply of skilled workers primarily drove high-skill hires, especially in R&D divisions. This skill-upgrading process boosted investments in R&D activities. Improved access to higher-quality inputs led to better production and organizational processes, product enhancements, and an increased likelihood of obtaining quality certifications, which serve as a straightforward objective measure of firm-level upgrading. Collectively, these changes were crucial for firms to increase their exports at both the extensive and intensive margins. This effect was driven by a rise in differentiated product exports, allowing firms to enter new and more sophisticated markets, particularly in high- and upper-middle-income countries.

Keywords: firm-level upgrading; migration; trade; development (search for similar items in EconPapers)
JEL-codes: D22 D24 F14 F16 F22 J61 L16 O14 O31 (search for similar items in EconPapers)
Date: 2025
New Economics Papers: this item is included in nep-dev, nep-int, nep-lab and nep-mig
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Persistent link: https://EconPapers.repec.org/RePEc:ces:ceswps:_11645

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