Imported Intermediate Inputs and Domestic Product Growth: Evidence from India

Quarterly Journal of Economics, Vol. 125, No. 4, pp. 1727-1767, 2010

36 Pages Posted: 26 Oct 2011

See all articles by Pinelopi Goldberg

Pinelopi Goldberg

Yale University - Department of Economics; National Bureau of Economic Research (NBER); Yale University - Cowles Foundation; Peterson Institute for International Economics; Bureau for Research and Economic Analysis of Development (BREAD); Centre for Economic Policy Research (CEPR)

Amit Khandelwal

Columbia University - Columbia Business School, Finance; National Bureau of Economic Research (NBER); Bureau for Research and Economic Analysis of Development (BREAD); Jameel Poverty Action Lab (JPAL)

Nina Pavcnik

Dartmouth College - Department of Economics; Centre for Economic Policy Research (CEPR); National Bureau of Economic Research (NBER)

Petia B. Topalova

International Monetary Fund (IMF)

Date Written: 2010

Abstract

New goods play a central role in many trade and growth models. We use detailed trade and firm-level data from India to investigate the relationship between declines in trade costs, imports of intermediate inputs and domestic firm product scope. We estimate substantial gains from trade through access to new imported inputs. Moreover, we find that lower input tariffs account on average for 31 percent of the new products introduced by domestic firms. This effect is driven to a large extent by increased firm access to new input varieties that were unavailable prior to the trade liberalization.

Suggested Citation

Goldberg, Pinelopi (Penny) and Khandelwal, Amit Kumar and Pavcnik, Nina and Topalova, Petia B., Imported Intermediate Inputs and Domestic Product Growth: Evidence from India (2010). Quarterly Journal of Economics, Vol. 125, No. 4, pp. 1727-1767, 2010, Available at SSRN: https://ssrn.com/abstract=1949294

Pinelopi (Penny) Goldberg

Yale University - Department of Economics ( email )

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Yale University - Cowles Foundation

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Peterson Institute for International Economics ( email )

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Bureau for Research and Economic Analysis of Development (BREAD) ( email )

Duke University
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Centre for Economic Policy Research (CEPR) ( email )

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United Kingdom

Amit Kumar Khandelwal (Contact Author)

Columbia University - Columbia Business School, Finance ( email )

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HOME PAGE: http://www0.gsb.columbia.edu/faculty/akhandelwal/

National Bureau of Economic Research (NBER) ( email )

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HOME PAGE: http://www.nber.org/people/amit_khandelwal

Bureau for Research and Economic Analysis of Development (BREAD) ( email )

Duke University
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United States

Jameel Poverty Action Lab (JPAL) ( email )

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Nina Pavcnik

Dartmouth College - Department of Economics ( email )

6106 Rockefeller Hall
Hanover, NH 03755
United States
603-646-2537 (Phone)
603-646-2122 (Fax)

Centre for Economic Policy Research (CEPR)

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United Kingdom

National Bureau of Economic Research (NBER)

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Petia B. Topalova

International Monetary Fund (IMF) ( email )

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Washington, DC 20431
United States

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