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Imports, supply chains, and firm productivity

Author

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  • Carol Newman
  • John Rand
  • Finn Tarp

Abstract

This paper explores the relationship between imports and firm productivity, focusing on imported intermediates. Using firm-level data on over 20,000 manufacturing firms in Viet Nam, we find evidence for competition-induced productivity gains from trade. We show that gains in intermediate sectors spill-over to downstream sectors such that firms using more inputs from import-intensive sectors experience higher productivity gains. The evidence indicates that the main source of spill-over is better quality, domestically produced inputs. Ignoring the gains from trade through this mechanism may significantly underestimate the impact of trade on productivity.

Suggested Citation

  • Carol Newman & John Rand & Finn Tarp, 2016. "Imports, supply chains, and firm productivity," WIDER Working Paper Series 090, World Institute for Development Economic Research (UNU-WIDER).
  • Handle: RePEc:unu:wpaper:wp2016-090
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    File URL: https://www.wider.unu.edu/sites/default/files/wp2016-90.pdf
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    References listed on IDEAS

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    Cited by:

    1. repec:eee:eecrev:v:101:y:2018:i:c:p:250-267 is not listed on IDEAS
    2. Newman, Carol & Rand, John & Tarp, Finn & Trifkovic, Neda, 2018. "The transmission of socially responsible behaviour through international trade," European Economic Review, Elsevier, vol. 101(C), pages 250-267.

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    Keywords

    imports; supply chains; productivity; Viet Nam;

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