Imports, supply chains, and firm productivity
Carol Newman (),
John Rand () and
Finn Tarp ()
No 90, WIDER Working Paper Series from World Institute for Development Economic Research (UNU-WIDER)
This paper explores the relationship between imports and firm productivity, focusing on imported intermediates. Using firm-level data on over 20,000 manufacturing firms in Viet Nam, we find evidence for competition-induced productivity gains from trade. We show that gains in intermediate sectors spill-over to downstream sectors such that firms using more inputs from import-intensive sectors experience higher productivity gains. The evidence indicates that the main source of spill-over is better quality, domestically produced inputs. Ignoring the gains from trade through this mechanism may significantly underestimate the impact of trade on productivity.
Keywords: imports; supply chains; productivity; Viet Nam (search for similar items in EconPapers)
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Persistent link: https://EconPapers.repec.org/RePEc:unu:wpaper:wp2016-090
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