No abstract

Can input-trade liberalization increase the demand for managers? Imported inputs are an important source of technology in ‡ows. Previous research on the implications of imported inputs overlooked their potential e¤ect on the demand for managing the new incoming knowledge. Adopting the case of India, this paper presents a …rst empirical attempt to …ll this gap. Using detailed …rm-level data that uniquely distinguishes between the compensations of managers and non-managers, and exploiting the exogenous nature of India's Eight-Plan trade reform, we investigate the potential causal link between input-trade liberalization and the demand for managers relative to non-managers. We …nd that a decrease in input tari¤s increases the relative demand for managers, primarily in domestic …rms that use the imported inputs to produce intermediate goods. Speci…cally, a 10% drop in input tari¤s induces, on average, a 1-1.5% increase in the compensation share of managers, manifested via increases in both their number as well as average wages and bonuses. These patterns are: (i) observed across the …rms' size distribution; (ii) applicable for both exporting and non-exporting …rms; (iii) stronger in familyrun …rms that operate under ‡exible labor market regulations; (iv) relatively more dominant in the short-run. In addition, we show that unlike changes in input tari¤s, import competition does not a¤ect the relative demand for managers.

While there has been extensive research on the Dutch Disease (DD), very little attention, if any, has been devoted to the regional mechanisms through which it may manifest itself. This is the first empirical attempt to research a 'regional DD' by looking at the local and spatial impacts of resource windfalls across Canadian provinces and territories. We construct a new panel dataset to examine separately the key DD channels; namely, the Spending Effect (SE) and the Resource Movement Effect (RME). Our analysis reveals that the standard DD mechanisms are also relevant at the regional level; specifically, we find that: (a) Resource windfalls are associated with higher inflation and a labour (capital) shift from (to) non-primary tradable sectors. (b) Resource windfalls in neighbouring regions are associated with a capital (labour) shift from (to) non-primary tradable sectors in the source region. (c) The (spatial) DD explains (51%) 20% of the adverse effects of resource windfalls (in neighbouring regions) on region-specific non-mineral international exports (in the source region), and does not significantly affect domestic ones.