The role of imports in the intensive margin of exports

Francisco Requena Silvente, Guadalupe Serrano and Raúl Mínguez
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Guadalupe Serrano: Universitat de València, Valencia, Spain
Raúl Mínguez: Chamber of Commerce of Spain & Universidad Nebrija, Madrid, Spain

No 2206, Working Papers from Department of Applied Economics II, Universidad de Valencia

Abstract: We investigate the impact of imports of intermediate inputs on export value and scope among Spanish regular two-way trade manufacturing firms over the period 1997-2018. After controlling for firm characteristics and addressing endogeneity using an IV strategy, we find that firms that import intermediate inputs from non-EUEFTA countries enhance the volume and scope of their EU15 exports. The impact was higher when firms imported intermediate inputs from the high-income non-EUEFTA countries before the 2008 financial crisis. However, since 2008, purchase of intermediate inputs from the low-income non-EUEFTA countries become as relevant as those from high income countries. We interpret this apparently surprising result as the optimal response of Spanish firms to diversify their import portfolio as a consequence of an increase in the product upgrading and quality improvement of cheaper intermediate inputs from developing countries after the crisis.

Keywords: Firm-level data; exports value; firm scope; imports of intermediate inputs; origin of imports; pre and post-crisis (search for similar items in EconPapers)
JEL-codes: F14 F23 L25 (search for similar items in EconPapers)
Date: 2022-09
New Economics Papers: this item is included in nep-bec and nep-int
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