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This draft: March 4, 2020. We are thankful to Emine Boz, Gita Gopinath, Andrei Levchenko, Diego Cerdeiro, Petia Topalova, and seminar and conference participants at the IMF, Banco de la Republica, Fedesarrollo, and the European Economics Association for helpful comments. The views expressed in the paper are solely those of the authors and do not necessarily represent the views of the IMF.
Using data from Argentina Bustos (2011) providesalink between aregional free trade agreement and technology upgrading.
Gutiérrez and Philippon (2017) show that increased competition from China leads to an increase in capital stock for firms with high market to book values.
Estevadeordal and Taylor (2013) demonstrate a positive link between trade liberalization and growth in a cross-country setting.
We ignored investment into structures, buildings, and land.
The decline in investment rate reflects a more general long-term trend of decline in Colombian manufacturing.
We define 33 sectors analogously to the way they are defined in the 2008 OECD input-output Table for Colombia.
We use shares of expenditures on intermediate inputs rather than capital originating in different sectors since, to our knowledge, sectoral capital expenditure shares are unavailable for Colombia. As a robustness check, we use alternative measures of exposure to tariff shock using trade-level microdata