Productivity and the decision to import and export: Theory and evidence

Abstract

This paper develops an open economy model with heterogeneous final goods producers who simultaneously choose whether to export their goods and whether to use imported intermediates. The model highlights mechanisms whereby import policies affect aggregate productivity, resource allocation, and industry export activity along both the extensive and intensive margins. Using the theoretical model, we develop and estimate a structural empirical model that incorporates heterogeneity in productivity and shipping costs using Chilean plant-level data for a set of manufacturing industries. The estimated model is consistent with the key features of the data regarding productivity, exporting, and importing. We perform a variety of counterfactual experiments to assess quantitatively the positive and normative effects of barriers to trade in import and export markets. These experiments suggest that there are substantial aggregate productivity and welfare gains due to trade. Furthermore, because of import and export complementarities, policies which inhibit the importation of foreign intermediates can have a large adverse effect on the exportation of final goods.

The micro evolution of trade and turnover in Turkey under the global crisis

“…Indeed, during the crisis the probability of entry in foreign markets did not significantly change with respect to the previous period and, when total exports are considered, the firm probability to stop exporting in fact decreased. In addition, in line with the existing evidence on the positive association between firm importing and exporting (Kasahara and Lapham, 2008;Muû ls and Pisu, 2009;Aristei et al, 2013;Lo Turco and Maggioni, 2013) which may prove more important under the economic downturn (Behrens et al, 2012), from panel B it emerges that importers were actually more likely to start exporting in the recession. The likeliness of the drop of a product from the firm export basket was however increased by the crisis, thus contributing to explain the export slump, even if this result is not confirmed for regular exports.…”

“…As far as firm access to import markets is concerned we show that importing, as expected, favours export activity in the crisis. Imported inputs may foster export activity thanks to the existence of common sunk costs and/or the enhancement of competitiveness occurring through cost saving or technology transfer (Kasahara and Lapham, 2008;Muû ls and Pisu, 2009;Aristei et al, 2013;Lo Turco and Maggioni, 2013). We show that this linkage is strengthened during the crisis.…”

Redirecting International Trade: Contracts, Conflicts, and Institutions

“…Further supporting evidence of a two-way interdependence between exports and imports is presented by e.g. Kasahara and Lapham (2013) and Aristei et al (2013). Navas et al (2013) present theoretical arguments for a two-way relation by pointing to how imports enhance firm-level productivity, which in turn promotes Table 6 Interdependence between exports and offshoring, ZOIB models.…”

Learning by Exporting in Turkey: An Investigation for Existence and Channels

“…However, since I do not restrict matches to come from the same sector 15 , I have calculated ATT effects both on absolute and relative variables. In the latter case, variables are expressed as a deviation from the industry-year mean, in order to take into account the sectoral and time evolution 16 .…”