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Do Imports of Intermediate Inputs Generate Higher Productivity? Evidence from Ecuadorian Manufacturing Firms

1 month ago   |   By The World Economy

Abstract
This paper examines the causal effect of importing on firm productivity. We use an augmented Cobb-Douglas production function in which the static and dynamic effects of importing and exporting are estimated for formal manufacturing firms in Ecuador. We use a rich administrative dataset that covers the period 2007 - 2018 and estimate total factor productivity at the firm level. Our results show that both static and dynamic effects are important sources of gains from importing. We find that static and dynamic gains in productivity from importing intermediates are higher in more...
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