Importing, Exporting and Innovation in Developing Countries
Recent studies have shown that not only exporters but also importers perform better than firms that do not trade. Using a detailed firm level dataset from 43 developing countries, I show that there are persistent differences in evolution of firms w...
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2014
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| Online Access: | http://documents.worldbank.org/curated/en/2009/12/11512123/importing-exporting-innovation-developing-countries http://hdl.handle.net/10986/19957 |
| Summary: | Recent studies have shown that not only
exporters but also importers perform better than firms that
do not trade. Using a detailed firm level dataset from 43
developing countries, I show that there are persistent
differences in evolution of firms when they are grouped
according to their trade orientation as: two-way traders
(both importing and exporting), only exporters, only
importers, and non-traders. Extending the existing models of
firm evolution in open economies by incorporating importing
decision, I show that: i) globally engaged firms are larger,
more productive, and grow faster than non-traders; ii)
two-way traders are the fastest growing and most innovative
group who are followed by only-exporters; iii) estimating
export premium without controlling for import status is
likely to overestimate the actual value by capturing the
import premium; and iv) R&D investment contributes to
growth of traders significantly more than to non-traders.
Finally I show the robustness of the findings by providing
evidence from the panel data constructed from the original
dataset and controlling for variables that are likely to
affect firm growth. |
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