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Are importing and exporting complements or substitues in an emerging economy? The case of Colombia

Author

Listed:
  • Andrés Mauricio Gómez-Sánchez

    (Universidad del Cauca and Universitat de València)

  • Juan A. Máñez

    (Universitat de València and ERICES)

  • Juan A. Sanchis

    (Universitat de València and ERICES)

Abstract

The aim of this paper is investigating the impact of two firm trading strategies (exporting and importing) on total factor productivity (TFP) and the potential complementarity/substitutability effects of these strategies. To assess these effects, we obtain robust estimates of TFP using a GMM approach that explicitly reckons the ability of firms’ trading experience to affect productivity. We use data for Colombian manufacturing firms from the Annual Manufacturing Survey spanning from 2007-2016. Our estimations results suggest that, regardless of the technological intensity of the industry in which the firm operates, active trading strategies (only exporting, only importing, both importing and exporting) pay positive rewards in terms of productivity. Nevertheless, whilst we find positive synergies (complementary) between exporting and importing for firms in med-high tech sectors, for firms operating in low-tech and med-low tech sectors, importing and exporting appear to be substitutes.

Suggested Citation

  • Andrés Mauricio Gómez-Sánchez & Juan A. Máñez & Juan A. Sanchis, 2021. "Are importing and exporting complements or substitues in an emerging economy? The case of Colombia," Working Papers 2106, Department of Applied Economics II, Universidad de Valencia.
  • Handle: RePEc:eec:wpaper:2106
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    References listed on IDEAS

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    More about this item

    Keywords

    imports; export; productivity; complementarity; substitutability;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity

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