 How firms accumulate inputs: Evidence from import switchingDan Lu, Asier Mariscal and Luis Fernando Mejía Journal of International Economics, 2024, vol. 148, issue C Abstract: We uncover new dynamic facts in Colombian manufacturing importers’ data. First, imported input switching, a firm’s simultaneous adding and dropping of foreign intermediates, is pervasive and a substantial fraction of firm’s imports. Second, larger firms switch more conditional on age, whereas younger firms switch more conditional on size. Third, the number of imported varieties increases with firm age. Fourth, inputs of lower expenditure are more frequently dropped. Fifth, firms that switch more, have larger sales growth. Analogous facts also hold for suppliers. We propose a dynamic model where firms accumulate foreign suppliers and choose which heterogeneously productive intermediates to import. A firm compares each input’s productivity across suppliers and keeps the best source, switching, lowering its unit cost, and growing in size. In the calibrated model, a 20% tariff reduction: (1) generates a 5.2% increase in welfare across steady states, and (2) upon impact only 76% of the gains accrue. Keywords: Firms; Intermediate inputs; Suppliers; Intangible capital accumulation; Input heterogeneity; Input choice; Firm lifecycle; Input switching (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:inecon:v:148:y:2024:i:c:s0022199623001332 DOI: 10.1016/j.jinteco.2023.103847 Access Statistics for this article Journal of International Economics is currently edited by Gourinchas, Pierre-Olivier and RodrÃguez-Clare, Andrés More articles in Journal of International Economics from Elsevier |
Is your work missing from RePEc? Here is how to contribute.
Questions or problems? Check the EconPapers FAQ or send mail to .
EconPapers is hosted by the
School of Business at Örebro University.