Analysis of the import activity of European firms

The growing internationalisation of the world economy in recent decades has placed firms under strong competitive pressures, but has also handed them new opportunities to improve their productivity by exploiting, for example, the cost advantages and technological progress available to those which import intermediate goods and services for use in their production. Despite the strong development of this type of imports in world trade and the differences in import dependency across countries with a similar level of development, few studies have analysed the factors that determine whether a firm will import. In this respect, the EFIGE database (which contains European firm data obtained through a survey conducted in 2008), enables not only the factors that make it more likely that a firm will import intermediate inputs for its production to be analysed, but also, since it has been implemented homogeneously across the four large euro area countries (Germany, France, Italy and Spain), the source of the differences between them to be investigated. First of all, this article briefly reviews the evidence available on the different reasons that lead a firm to import intermediate goods and services for its production, and the expected impact of importing on its productivity according to the type of good imported. It then goes on to describe the database used in this article and to identify the variables which, according to the preceding analysis, affect firms’ import decisions in the four main euro area countries. Although EFIGE does not allow researchers to take into account the impact that the crisis dating from 2008 has had on the imports and characteristics of firms, it can be expected that changes in strategic decisions and in business structure will take place gradually. Next, a probit model is estimated to assess the extent to which the decision to import is determined by the specific characteristics of the firm, of its sector and of the country in which it is situated. Then the article analyses whether there are differences between the variables which determine a firm’s decision to import different types of goods and, finally, the main conclusions are summarised.