Worker reallocation, firm innovation, and Chinese import competition
利用丹麦和葡萄牙的企业-员工匹配数据，研究发现进口竞争通过企业间工人重新配置增加研发人员占比，从而促进创新，但劳动力市场僵化会阻碍这一机制。
While recent work has documented a nexus between international trade and firm innovation, the underlying mechanisms explaining firms’ innovation in response to import competition are, thus far, poorly understood. To identify the mechanism of labor adjustments and its economic relevance, we use longitudinal linked employer–employee data from Denmark (1995–2012). We first show that import competition triggers a significant increase in the share of R&D workers at the firm level. The majority of the increase in the share of R&D workers is explained by between-firm, not within-firm, worker reallocation. The significance of this reallocation becomes evident when we show that innovation improvements are observed only among firms that experience a large increase in the share of R&D workers, especially if this increase is achieved through between-firm worker reallocation. We then extend our analysis to Portugal where the labor market is more rigid and find contrasting yet consistent results: labor reallocation occurs only within firms and it does not result in increased innovation.