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(Indirect) Input Linkages

Author

Listed:
  • Marcela Eslava
  • Ana Cecília Fieler
  • Daniel Yi Xu

Abstract

Relative to backward firms, technologically-advanced firms source inputs from other advanced firms. These sourcing patterns lead to a magnification effect of technology adoption. A firm that adopts higher-technology increases the relative supply and demand for higher-technology inputs. As a result, it positively influences the technology of other firms in its production chain. Using data from a Colombian manufacturing survey, we provide evidence that advanced firms disproportionately value advanced inputs. More novel, we provide suggestive evidence that technological advancements in some firms increase the technology of other firms indirectly linked to them through a common input market.

Suggested Citation

  • Marcela Eslava & Ana Cecília Fieler & Daniel Yi Xu, 2015. "(Indirect) Input Linkages," American Economic Review, American Economic Association, vol. 105(5), pages 662-666, May.
  • Handle: RePEc:aea:aecrev:v:105:y:2015:i:5:p:662-66
    Note: DOI: 10.1257/aer.p20151122
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    References listed on IDEAS

    as
    1. Nico Voigtländer, 2014. "Skill Bias Magnified: Intersectoral Linkages and White-Collar Labor Demand in U.S. Manufacturing," The Review of Economics and Statistics, MIT Press, vol. 96(3), pages 495-513, July.
    2. Pinelopi Koujianou Goldberg & Amit Kumar Khandelwal & Nina Pavcnik & Petia Topalova, 2010. "Imported Intermediate Inputs and Domestic Product Growth: Evidence from India," The Quarterly Journal of Economics, Oxford University Press, vol. 125(4), pages 1727-1767.
    3. Luis Garicano & Esteban Rossi-Hansberg, 2006. "Organization and Inequality in a Knowledge Economy," The Quarterly Journal of Economics, Oxford University Press, vol. 121(4), pages 1383-1435.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Muscillo, Alessio & Pin, Paolo & Razzolini, Tiziano & Serti, Francesco, 2018. "Does "Network Closure" Beef up Import Premium?," IZA Discussion Papers 12036, Institute of Labor Economics (IZA).
    2. Haeri, Ali & Arabmazar, Abbas, 2018. "Designing an Industrial Policy for Developing Countries: a New Approach," MPRA Paper 89048, University Library of Munich, Germany.

    More about this item

    JEL classification:

    • L14 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Transactional Relationships; Contracts and Reputation
    • L60 - Industrial Organization - - Industry Studies: Manufacturing - - - General
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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