GLOBALIZATION, LABOR MARKETS AND DEVELOPING COUNTRIES – GLOLADE

Over the past few decades, trade liberalization has played a central role in the structural reforms of developing countries. In recent times, considerable focus has shifted towards examining the microeconomic impacts of openness on labor markets and firms. The literature on the micro-economic effects of trade liberalization on labor markets have focused mainly on the formal manufacturing sector (Amiti and Cameron, 2012, Fieler et al., 2018, Bas and Paunov, 2021). This literature is not able to capture the impact of globalization on a large share of the labor force - almost half of economic activity (La Porta and Shleifer, 2014) - that is employed in the informal sector in the developing world. At the same time, the literature on firms and trade has so far largely neglected the key distinction between revenue productivity, i.e., the capacity of firms to generate revenue with a given amount of inputs and quantity productivity, i.e., the capacity of firms to generate physical output with a given amount of inputs (Forlani et al., 2023). We aim to contribute filling these gaps.