Importing, Exporting, and Innovation in Developing Countries

Murat Seker

MPRA Paper from University Library of Munich, Germany

Abstract: Several recent studies have shown that not only exporters but also importers perform better than firms that do not trade. Using a detailed firm level dataset from 43 developing countries, I show that there are persistent differences in evolution of firms when they are grouped according to their trade orientation as: two-way traders (both importing and exporting), only exporters, only importers, and non-traders. Extending the existing models of firm evolution in open economies by incorporating importing decision, I provide a simple model and empirically show that: i) globally engaged firms are larger, more productive, and grow faster than non-traders; ii) two-way traders are the fastest growing and most innovative group who are followed by only-exporters; and iii) estimating export premium without controlling for import status is likely to overestimate the actual value by capturing the import premium. Finally I show the robustness of the findings by providing evidence from the panel data constructed from the original dataset and controlling for variables that are likely to affect firm growth.

Keywords: Globally engaged firms; trade in developing countries; R&D and innovation; firm and industry dynamics (search for similar items in EconPapers)
JEL-codes: F14 L11 O31 (search for similar items in EconPapers)
Date: 2009-10, Revised 2011-02
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (11)

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Related works:
Journal Article: Importing, Exporting, and Innovation in Developing Countries (2012)
Working Paper: Importing, exporting and innovation in developing countries (2009)
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Persistent link: https://EconPapers.repec.org/RePEc:pra:mprapa:29904

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