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Imports and TFP at the firm level: the role of absorptive capacity

  • Patricia Augier
  • Olivier Cadot
  • Marion Dovis

This paper estimates the effect of the decision to import intermediate goods and capital equipment on Total Factor Productivity (TFP) at the firm level on a panel of Spanish firms (19912002). We use two alternative approaches. In the first, we estimate TFP and apply a diffindiff estimator with a control group constructed by propensityscore matching. In the second, direct method, we estimate TFP with imported inputs as a state variable in one stage. Both approaches show that the effect of a firm's decision to source intermediates and capital equipment abroad on its TFP depends critically on its capacity to absorb technology, measured by the proportion of skilled labour.

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Article provided by Canadian Economics Association in its journal Canadian Journal of Economics.

Volume (Year): 46 (2013)
Issue (Month): 3 (August)
Pages: 956-981

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Handle: RePEc:cje:issued:v:46:y:2013:i:3:p:956-981
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