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AbstractThis paper examines the performance of the service sector in the Eastern European transition economies during the 1997–2004 period. The performance of the service sector as a whole and of its sub‐sectors is very heterogeneous within the region. Service sub‐sectors that are information and communications technology producers or users and those using skilled labour more intensively exhibit the highest labour productivity growth. Our estimates show a positive and significant effect of liberalization on service labour productivity growth that is stronger for sub‐sectors that are more distant from the technological frontier. Service liberalization is also shown to have a positive effect on labour productivity levels and growth of downstream manufacturing industries.

AbstractThis paper investigates whether increased import competition leads firms to engage in incremental innovation reflected in product quality upgrading using Chilean manufacturing firm‐product data and measuring product quality with unit values (prices). We identify causal effects of import competition using an effective trade barrier measure – transport costs – as instruments for import penetration ratios across industries. Transport costs have a negative and significant effect on product quality. The evidence suggests that estimated unit value increases capture product quality upgrading, imports' competition effects drive quality upgrading, and benefits depend on firms' industrial specialization. Easier access to intermediate inputs also fosters quality upgrading.

We contribute to the technology, skills and jobs debate by exploiting a novel dataset for Chilean firms between 2007 and 2013, with information on the firms' adoption of complex software used in client management, production or administration and business software packages. Instrumental variables estimates show that, in the medium run, adoption of this complex software reallocates employment away from professional and technical workers, toward administrative and unskilled workers (production and services). Adoption also increases the use of routine and manual tasks and reduces that of abstract tasks within firms. The contrast between ours and previous findings shows that labor market impacts of technology adoption hinge on the type of technology and its complementarity with the skills content of occupations. ; Centro de Estudios Distributivos, Laborales y Sociales