Import Intensity and Firm Productivity-An Empirical Analysis Based on Swedish Firm-Level Data

Type Thesis or Dissertation - Master
Title Import Intensity and Firm Productivity-An Empirical Analysis Based on Swedish Firm-Level Data
Author(s)
Publication (Day/Month/Year) 2016
URL http://lup.lub.lu.se/luur/download?func=downloadFile&recordOId=8878512&fileOId=8878514
Abstract
Most exporting firms in the world also import foreign inputs in production. Recent findings
elucidate the importance of imports as a driver of firm productivity on the amount of goods
exported. This study aims at investigating the correlation between imports and firm
productivity, not the causality. It will add to previous research by shifting focus from import
participation to import intensity and outline if trading firms may increase their import
intensity to gain productivity effects. Based on a firm-level survey in the Swedish
manufacturing sector during 2014, a (Pseudo) Poisson Maximum Likelihood estimator is used
in the empirical analysis. We find a positive correlation between import intensity and firm
productivity. This finding is in line with heterogeneous firm theory, from which we argue,
that these productivity effects are mainly benefiting high productive firms. Policies acting to
decrease trade restrictions might help low productive domestic firms surpass the productivity
verge, enter the import market and benefit from increasing import intensity

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