Beschreibung:
Recent studies have found that tariff reductions on imported intermediate inputs are associated with increased firm level productivity and higher wages. Nevertheless, little is known about the impact on firm level employment in developing economies. Using establishment and industry tariff level data from Vietnam, we find that tariff reductions on imported intermediates generate strong employment growth for foreign owned firms, but not domestically owned firms. Our results provide the first evidence of Hicks-Allen complementarity between intermediate imports and labour in the context of export processing firms. They suggest that access to foreign capital and developing manufacturing sectors within global value chains, is an important source of employment in emerging countries