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Importing, exporting and innovation in developing countries

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  • Seker, Murat

Abstract

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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Bibliographic Info

Paper provided by The World Bank in its series Policy Research Working Paper Series with number 5156.

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Date of creation: 01 Dec 2009
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Handle: RePEc:wbk:wbrwps:5156

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Keywords: E-Business; Labor Policies; Microfinance; Economic Theory&Research; Emerging Markets;

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References

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Citations

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Cited by:
  1. María D. Parra & Inmaculada Martínez-Zarzoso, 2014. "Imported intermediate inputs and Egyptian exports: Exploring the links," Working Papers 2014/09, Economics Department, Universitat Jaume I, Castellón (Spain).
  2. Seker, Murat, 2011. "Trade policies, investment climate, and exports across countries," Policy Research Working Paper Series 5654, The World Bank.
  3. Şeker, Murat & Yang, Judy S., 2014. "Bribery solicitations and firm performance in the Latin America and Caribbean region," Journal of Comparative Economics, Elsevier, vol. 42(1), pages 246-264.
  4. David Aristei & Davide Castellani & Chiara Franco, 2013. "Firms’ exporting and importing activities: is there a two-way relationship?," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 149(1), pages 55-84, March.
  5. Seker, Murat, 2011. "Trade Policies, Investment Climate,and Exports," MPRA Paper 29905, University Library of Munich, Germany.
  6. Seker, Murat, 2011. "Effects of licensing reform on firm innovation : evidence from India," Policy Research Working Paper Series 5876, The World Bank.

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