Imports, Productivity Growth, and Supply Chain Learning

160510 Public Policy FOS: Political science 05 social sciences 1. No poverty Supply chain Southeast Asia 99999 Engineering not elsewhere classified Imports FOS: Other engineering and technologies Indonesia 0502 economics and business 8. Economic growth Productivity Technology transfer
DOI: 10.1016/j.worlddev.2006.10.009 Publication Date: 2007-05-11T11:47:15Z
ABSTRACT
We present evidence that importing is a source of international technology transfer. Using a detailed panel of Indonesian manufacturers, our analysis shows that firms in industries supplying increasingly import-intensive sectors have higher productivity growth than other firms. This finding suggests that linkages through vertical supply relationships are the channel through which import-driven technology transfer occurs. To our knowledge, these are the first firm-level results showing that downstream imports play a role in productivity gains. Together with the literature linking FDI and exporting to technology spillovers, the results provide a third component to the argument that trade and openness promote economic growth.
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