Productivity Effects of Internationalisation Through the Domestic Supply Chain: Evidence from Europe

Bruno Merlevede and Angelos Theodorakopoulos

No 627689, Working Papers of VIVES - Research Centre for Regional Economics from KU Leuven, Faculty of Economics and Business (FEB), VIVES - Research Centre for Regional Economics

Abstract: This paper analyses whether indirect effects of internationalisation occur through the domestic supply chain. We investigate productivity effects for a given firm resulting from the import or export of intermediate inputs by domestic upstream and downstream industries. Using a rich sample of manufacturing firms in 19 EU countries, we find evidence that domestic access to intermediate inputs that are also destined to foreign countries is associated with higher levels of revenue productivity. Further, our results highlight two common, but important, misspecification biases: ignoring the dynamic nature of productivity and estimating a value-added instead of a gross-output production function.

Keywords: offshoring; inshoring; supply chain; total factor productivity; trade; learning (search for similar items in EconPapers)
Pages: 47
Date: 2018-09-01
New Economics Papers: this item is included in nep-eff and nep-int
Note: paper number 2018.71
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Forthcoming in VIVES Discussion Paper, pages 1-47

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Related works:
Working Paper: PRODUCTIVITY EFFECTS OF INTERNATIONALISATION THROUGH THE DOMESTIC SUPPLY CHAIN: EVIDENCE FROM EUROPE (2018)
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Persistent link: https://EconPapers.repec.org/RePEc:ete:vivwps:627689

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