Imported Capital Input, Absorptive Capacity, and Firm Performance: Evidence from Firm-Level Data

Economic Inquiry, Forthcoming

Posted: 4 Mar 2011

See all articles by Mahmut Yasar

Mahmut Yasar

University of Texas at Arlington - Department of Economics; Emory University - Department of Economics

Multiple version iconThere are 2 versions of this paper

Date Written: March 2, 2011

Abstract

Importing capital inputs has been recognized as a critical channel for technology transfer across countries. We examine whether and to what extent the productive impact of imported capital varies with firms’ abilities to absorb new technologies using OLS, IV, and threshold regression estimators. We find that firms with higher absorptive capacity gain significantly more from importing foreign capital. Our results also suggest a threshold for such benefits. Furthermore, the productive contribution of skilled labor is significantly higher in firms that import foreign capital. Developing policies to augment absorptive capacity will help firms in developing countries to realize benefits associated with imported capital.

Keywords: Imported Capital Input, Absorptive Capacity, Productivity, Skill Intensity, Threshold Regression, China, Instrumental Variable Estimator

JEL Classification: F14, D24, L24, O33

Suggested Citation

Yasar, Mahmut, Imported Capital Input, Absorptive Capacity, and Firm Performance: Evidence from Firm-Level Data (March 2, 2011). Economic Inquiry, Forthcoming, Available at SSRN: https://ssrn.com/abstract=1774941

Mahmut Yasar (Contact Author)

University of Texas at Arlington - Department of Economics ( email )

701 S. West Street
Arlington, TX 76019
United States

Emory University - Department of Economics ( email )

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