Imported Inputs and Productivity
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Abstract
We estimate a model of importers in Hungarian microdata and conduct counterfactual analysis to investigate the effect of imported inputs on productivity. We find that importing all input varieties would increase a firm’s revenue productivity by 22 percent, about one-half of which is due to imperfect substitution between foreign and domestic inputs. Foreign firms use imports more effectively and pay lower fixed import costs. We attribute one-quarter of Hungarian productivity growth during the 1993–2002 period to imported inputs. Simulations show that the productivity gain from a tariff cut is larger when the economy has many importers and many foreign firms. (JEL D24, F13, F14, L60)
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The record
- Venue
- American Economic Review
- Topic
- Global trade and economics
- Field
- Economics, Econometrics and Finance
- Canadian institutions
- —
- Funders
- —
- Keywords
- Microdata (statistics)ProductivityCounterfactual thinkingEconomicsTariffRevenueQuarter (Canadian coin)ImperfectInternational tradeInternational economicsAgricultural economicsMacroeconomicsFinance
- Has abstract in OpenAlex
- yes