Import Churning and Export Performance of Multi-product Firms

Joze Damijan, Jozef Konings and Sašo Polanec

The World Economy, 2014, vol. 37, issue 11, 1483-1506

Abstract: type="main" xml:id="twec12196-abs-0001">

This paper analyses the impact of churning in the imported varieties of capital and intermediate inputs on firm export scope and productivity. Using detailed data on imports and exports at the firm-product-market level, we document substantial churning in both imports and exports for Slovenian manufacturing firms in the period 1994–2008. On average, a firm changes about one-quarter of imported and exported product-markets every year, while gross churning in terms of added and dropped product-markets is almost three times higher. A substantial share of this product churning is due to simultaneous imports and exports of firms in identical varieties within the same CN-8 product code (so called pass-on-trade). We find that churning in imported varieties is far more important than reduction in tariffs or declines in import prices for firms’ productivity growth and increased export product scope. We also find gross churning has a bigger impact on firm productivity improvements by a factor of more than 10 in comparison with net churning. Both adding and dropping of imported input varieties thus seem to be of utmost importance for firms aiming to optimise their input mix towards their most valuable inputs. These effects are further enhanced when excluding simultaneous trade in identical varieties, suggesting that pass-on-trade has less favourable effects on firms’ long-run performance than regular trade.

Date: 2014
References: Add references at CitEc
Citations: View citations in EconPapers (35)

Downloads: (external link)
http://hdl.handle.net/10.1111/twec.2014.37.issue-11 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:bla:worlde:v:37:y:2014:i:11:p:1483-1506

Ordering information: This journal article can be ordered from
http://www.blackwell ... bs.asp?ref=0378-5920

Access Statistics for this article

The World Economy is currently edited by David Greenaway

More articles in The World Economy from Wiley Blackwell
Bibliographic data for series maintained by Wiley Content Delivery ().