Investment Responses to Trade Liberalization: Evidence from U.S. Industries and Plants

Justin Pierce and Peter Schott

No 24071, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper examines the effect of a change in U.S. trade policy on the domestic investment of U.S. manufacturers. Using a difference-in-differences identification strategy, we find that industries more exposed to reductions in import tariff uncertainty exhibit relative declines in investment after the change in trade policy. Within industries, we find that this relationship is concentrated among establishments with low initial levels of labor productivity, capital intensity and skill intensity. Plants with high initial levels of skill intensity, by contrast, exhibit relative increases in investment with exposure. We also find evidence that establishments' investment activity is smoother following the policy change.

JEL-codes: E22 F1 F13 F14 F4 (search for similar items in EconPapers)
Date: 2017-11
New Economics Papers: this item is included in nep-int, nep-mac and nep-tid
Note: IFM ITI
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (6)

Published as Investment Responses to Trade Liberalization: Evidence from US Industries and Establishments , Justin Pierce, Peter Schott. in Trade and Labor Markets , Hanson and Redding. 2019

Downloads: (external link)
http://www.nber.org/papers/w24071.pdf (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:nbr:nberwo:24071

Ordering information: This working paper can be ordered from
http://www.nber.org/papers/w24071

Access Statistics for this paper

More papers in NBER Working Papers from National Bureau of Economic Research, Inc National Bureau of Economic Research, 1050 Massachusetts Avenue Cambridge, MA 02138, U.S.A.. Contact information at EDIRC.
Bibliographic data for series maintained by ().