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From firm-level imports to aggregate productivity: Evidence from Korean manufacturing firm data

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  • Ahn, JaeBin
  • Choi, Moon Jung

Abstract

Using Korean manufacturing firm-level data, this paper confirms that the use of imported inputs leads to increased productivity and that larger firms are more likely to use imported inputs. We find as a result that firm-level import decisions explain a non-trivial fraction of the fluctuations in manufacturing aggregate productivity in Korea over the period between 2006 and 2012. Specifically, our estimation results show that Korean manufacturing aggregate TFP declined by 8.7% during the Global Financial Crisis, about one-third of which is attributable to a contraction in firm-level import intensity. The main findings of this paper suggest a possible link between the recent global slowdown in productivity and the slowdown in global trade.

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  • Ahn, JaeBin & Choi, Moon Jung, 2020. "From firm-level imports to aggregate productivity: Evidence from Korean manufacturing firm data," Japan and the World Economy, Elsevier, vol. 56(C).
  • Handle: RePEc:eee:japwor:v:56:y:2020:i:c:s0922142520300396
    DOI: 10.1016/j.japwor.2020.101038
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    Cited by:

    1. Lee, Dongyeol, 2021. "Propagation of economic shocks through vertical and trade linkages in Korea: An empirical analysis," Japan and the World Economy, Elsevier, vol. 60(C).
    2. Hahn, Chin Hee & Choi, Yong-Seok, 2021. "Learning-to-export Effect as a Response to Export Opportunities: Micro-evidence from Korean Manufacturing," KDI Journal of Economic Policy, Korea Development Institute (KDI), vol. 43(4), pages 1-21.
    3. Nyeong Seon Son & Jung Hur, 2022. "An empirical study of firm productivity growth based on the dynamic selection model: Effects on the recent decline in Korean exports," Contemporary Economic Policy, Western Economic Association International, vol. 40(1), pages 190-203, January.
    4. Choi Hyelin & Jung Chun & Kim Subin, 2018. "The Effect of Restructuring on Labor Reallocation and Productivity Growth: An Estimation for Korea," Working Papers id:12429, eSocialSciences.

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    More about this item

    Keywords

    Firm-level imports; Firm-level productivity; Aggregate TFP; Global trade slowdown; Global financial crisis;
    All these keywords.

    JEL classification:

    • E3 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles
    • F1 - International Economics - - Trade
    • F4 - International Economics - - Macroeconomic Aspects of International Trade and Finance
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

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