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Trade Complexity and Productivity

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  • Carlo Altomonte
  • Gábor Békés

Abstract

We exploit a panel dataset of Hungarian fi rms merged with country and product-level trade data for the period 1992-2003 to investigate the relation between firms’ trading activities (importing, exporting or both) and productivity. From our transaction data a number of proxies are derived, measuring at the firm level some characteristics of the traded bundles associated to various technological and relationship-speci c dimensions of the trade activity, which we generally refer to as ‘trade complexity’. We find that our indicators of complexity are jointly correlated to the ex-ante productivity of trading fi rms, accounting for an additional third of the overall productivity premium. However, the elasticity of productivity to a change in the trade complexity indicators varies with di fferent indicators of complexity and with the trade status of the fi rm. Policy conclusions are drawn from these findings.

Suggested Citation

  • Carlo Altomonte & Gábor Békés, 2010. "Trade Complexity and Productivity," CeFiG Working Papers 12, Center for Firms in the Global Economy, revised 25 Oct 2010.
  • Handle: RePEc:cfg:cfigwp:12
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    References listed on IDEAS

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    JEL classification:

    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance

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