| |
N° 2009-35 |
  |
| December 2009 |
| Trade, Foreign Inputs and Firms’ Decisions: Theory and
Evidence |
| Maria Bas |
|
| We investigate the effect of different channels through which input trade liberalization affects firms’ export decisions. We develop a trade model with heterogeneous firms and sectors of varying imported
input intensity that reproduces different mechanisms through which the access to foreign inputs affects the performance of domestic firms. In industries with lower input tariffs (or more intensive in imported
intermediate goods), more firms become exporters and export larger volumes. The effect of firm productivity
on export status and export sales is greater for firms producing in these industries. The export
selection process is reinforced by the access to foreign inputs. We provide strong empirical evidence
in support of these theoretical predictions based on plant-level panel data from Argentina (1992-2001)
and Chile (1990-1999). Our findings suggest that the impact of firm productivity on the probability of
exporting and on the volume of exports is more pronounced for firms producing in industries that have a
greater access to foreign inputs. |
Non-technical summary  |
|
Résumé
non-technique
en français |
|
| Full text |
| |
|
| Firm heterogeneity; input trade liberalization; foreign intermediate goods; firm productivity and plant panel data |
Keywords |
| F10; F12; F41 |
JEL classification |
| |
|
| To visualise the full text document, use Acrobat
Reader |
|
| Contact:
|
|
| |
|
|
|
|
