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Productivity Dispersion and its Determinants: The Role of Import Penetration

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  • Daniela Maggioni

Abstract

The new heterogeneous firm models in international economics predict a negative impact of trade openness on within-sector productivity disparities, due to a restructuring process leading to a reallocation of resources towards more efficient firms and the exit of less productive ones. I test this hypothesis for the Italian manufacturing sectors making use of panel data models. I investigate the existence of heterogeneous effects in terms of origin of imports and I account for a geographical dimension computing the productivity dispersion indicator by sector and regional macro-area. The analysis is implemented within a comprehensive framework controlling for other potential determinants, such as technological factors and domestic competition. My findings show that competitive pressure from low income countries reduces the productivity heterogeneity across firms. On the contrary, a positive impact is detected for the increased availability of intermediates originating from developed countries. Copyright Springer Science+Business Media New York 2013

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  • Daniela Maggioni, 2013. "Productivity Dispersion and its Determinants: The Role of Import Penetration," Journal of Industry, Competition and Trade, Springer, vol. 13(4), pages 537-561, December.
    • Handle: RePEc:kap:jincot:v:13:y:2013:i:4:p:537-561
    DOI: 10.1007/s10842-012-0148-3
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    More about this item

    Keywords

    productivity; dispersion; imports; firm heterogeneity; L25; F14; O33; O47;
    All these keywords.

    JEL classification:

    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade

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