Imports, Productivity Growth, and Supply Chain Learning
46 Pages Posted: 8 Feb 2007
Abstract
We present evidence that importing is a source of international technology transfer. Using a detailed panel of Indonesian manufacturers, our analysis shows that firms in industries supplying increasingly import-intensive sectors have higher productivity growth than other firms. This finding suggests that linkages through vertical supply relationships are the channel through which import-driven technology transfer occurs. To our knowledge, these are the first firm-level results showing that downstream imports play a role in productivity gains. Together with the literature linking FDI and exporting to technology spillovers, the results provide a third component to the argument that trade and openness promote economic growth.
Keywords: Technology Transfer, Productivity, Imports, Supply Chain, Southeast Asia, Indonesia
JEL Classification: F2, O1, O3
Suggested Citation: Suggested Citation
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