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Imported Inputs and Productivity

The American economic review, 2015-12, Vol.105 (12), p.3660-3703 [Peer Reviewed Journal]

Copyright© 2015 American Economic Association ;ISSN: 0002-8282 ;EISSN: 1944-7981 ;DOI: 10.1257/aer.20150443

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  • Title:
    Imported Inputs and Productivity
  • Author: Halpern, László ; Koren, Miklós ; Szeidl, Adam
  • Subjects: Cost estimates ; Fixed costs ; Importers ; Imports ; Industrial productivity ; International economics ; International trade ; Productivity ; Revenue ; Tariffs
  • Is Part Of: The American economic review, 2015-12, Vol.105 (12), p.3660-3703
  • Description: 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.
  • Publisher: American Economic Association
  • Language: English
  • Identifier: ISSN: 0002-8282
    EISSN: 1944-7981
    DOI: 10.1257/aer.20150443
  • Source: ProQuest Central
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