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Trade Complexity and Productivity

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  • Carlo Altomonte
  • Gábor Békés

Abstract

We exploit a panel dataset of Hungarian fi rms merged with country and product-level trade data for the period 1992-2003 to investigate the relation between firms’ trading activities (importing, exporting or both) and productivity. From our transaction data a number of proxies are derived, measuring at the firm level some characteristics of the traded bundles associated to various technological and relationship-speci c dimensions of the trade activity, which we generally refer to as ‘trade complexity’. We find that our indicators of complexity are jointly correlated to the ex-ante productivity of trading fi rms, accounting for an additional third of the overall productivity premium. However, the elasticity of productivity to a change in the trade complexity indicators varies with di fferent indicators of complexity and with the trade status of the fi rm. Policy conclusions are drawn from these findings.

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Paper provided by Center for Firms in the Global Economy in its series CeFiG Working Papers with number 12.

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Date of creation: 25 Oct 2010
Date of revision: 25 Oct 2010
Handle: RePEc:cfg:cfigwp:12

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