Organizations and Tasks in Trade

Abstract

This dissertation consists of three essays at the intersection of international trade and labor economics. A common theme running through these chapters is the importance of firms' organization of production processes in shaping new working environments.

In the first essay (Chapter 1) I consider the response of German local employment to import competition from China --- typical of inter-industry trade ---, and from Eastern Europe --- typical of intra-industry input-output linkages. Using administrative data for the period 1995 to 2014 paired with an instrumental variable strategy, I find that the ability to import assembled products in the context of input-output linkages increases local employment to produce the very downstream stages of production, while the associated exposure to exports of parts has a negative employment effect suggestive of offshoring behavior.

In my second essay (Chapter 2) --- co-authored with Konstantin Koerner --- we study the onshore task recompostion in German firms conducting foreign direct investments (FDI) in Czech Republic. Our unique dataset compiles the universe of German multinational enterprises having affiliates in the Czech Republic. We perform a difference-in-differences estimation in a matched sample, in which propensity scores are drawn from a logit model selected by least absolute shrinkage. Relative to firms without any affiliates, multinational enterprises respond to FDI with increasing intensities of headquarter activities. We find sector-specific negative effects. We compare our findings with measures of job offshorability and we find that FDI-substitutable occupations do not necessarily overlap with offshorable ones.

Finally, my third essay (Chapter 3) focuses on understanding how firms' organization is linked to individual workers' career paths. Using French administrative data, I show that plants increasingly lost their ``middle layer" between 1995 and 2015, and that young workers take longer to move up the professional ladder over these years. Using a matched difference-in-differences estimation, I show that the removal of this middle layer (fragmentation) has substantial negative effects on workers' careers, as they are 65% less likely to be promoted afterwards, despite an increase in the employing plant’s value-added by 13%. Earnings responses are consistent with compensating differentials and changes in workers' rent-sharing environment.