Does input-trade liberalization affect firms'foreign technology choice ?

Maria Bas and Antoine Berthou

No 7883, Policy Research Working Paper Series from The World Bank

Abstract: This paper studies the impact of input-trade liberalization on firms'decision to upgrade foreign technology embodied in imported capital goods. The empirical analysis is motivated by a simple theoretical framework of endogenous technology adoption, heterogeneous firms and imported inputs. The model predicts a positive effect of input tariff reductions on firms'technology choice to source capital goods from abroad. This effect is heterogeneous across firms depending on their initial productivity level. Relying on India's trade liberalization episode in the early 1990s, this paper demonstrates that the probability of importing capital goods is higher for firms producing in industries that have experienced greater cuts on tariffs on intermediate goods. Only those firms in the middle range of the initial productivity distribution have benefited from input-trade liberalization to upgrade their technology.

Keywords: International; Trade; and; Trade; Rules (search for similar items in EconPapers)
Date: 2016-11-07
References: Add references at CitEc
Citations: View citations in EconPapers (2)

Downloads: (external link)
http://documents.worldbank.org/curated/en/889161478534043136/pdf/WPS7883.pdf (application/pdf)

Related works:
Journal Article: Does Input-Trade Liberalization Affect Firms’ Foreign Technology Choice? (2017)
Working Paper: Does input-trade liberalization affect firms' foreign technology choice? (2017)
Working Paper: Does input-trade liberalization affect firms' foreign technology choice? (2017)
Working Paper: Does Input-Trade Liberalization Affect Firms' Foreign Technology Choice? (2013)
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:wbk:wbrwps:7883

Access Statistics for this paper

More papers in Policy Research Working Paper Series from The World Bank 1818 H Street, N.W., Washington, DC 20433. Contact information at EDIRC.
Bibliographic data for series maintained by Roula I. Yazigi (ryazigi@worldbank.org).