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PRODUCTIVITY EFFECTS OF INTERNATIONALISATION THROUGH THE DOMESTIC SUPPLY CHAIN: EVIDENCE FROM EUROPE

Bruno Merlevede () and Angelos Theodorakopoulos ()

Working Papers of Faculty of Economics and Business Administration, Ghent University, Belgium from Ghent University, Faculty of Economics and Business Administration

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)
JEL-codes: D22 D24 D57 D83 F14 L25 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-eff, nep-eur and nep-int
Date: 2018-09
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Persistent link: https://EconPapers.repec.org/RePEc:rug:rugwps:18/949

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