From Firm-Level Imports to Aggregate Productivity: Evidence from Korean Manufacturing Firms Data
33 Pages Posted: 9 Dec 2016
Date Written: August 2016
Using the Korean manufacturing firm-level data, this paper confirms that three stylized facts on importing hold in Korea: the ratio of imported inputs in total inputs tends to be procyclical; the use of imported inputs increases productivity; and larger firms are more likely to use imported inputs. As a result, we find that firm-level import decisions explain a non-trivial fraction of aggregate productivity fluctuations in Korea over the period between 2006 and 2012. Main findings of this paper suggest a possible link between the recent global productivity slowdown and the global trade slowdown.
Keywords: Manufacturing sector, Korea, Republic of, Imports, Total factor productivity, Econometric models, Time series, Firm-level imports, Productivity pro-cyclicality, Aggregate TFP growth
JEL Classification: E30, F10, F40, O40
Suggested Citation: Suggested Citation