Imported intermediates, innovation, and product scope: Firm-level evidence from developing countries

Shepherd, Ben and Stone, Susan (2012): Imported intermediates, innovation, and product scope: Firm-level evidence from developing countries.

Abstract

This paper generalizes recent work for India which shows that the use of imported intermediates is associated with the creation of new product varieties by domestic firms. It uses firm-level data for 17 developing countries and 13 sectors to show that firms that source their inputs internationally tend to introduce more new products than those that use domestic inputs only. In the preferred specification, a firm that imports all of its intermediates tends to produce 18% more new products than a firm that sources all of its inputs locally, after controlling for other factors.

• Item Type: MPRA Paper
• Language: English
• Keywords: Intermediate Inputs; Product Scope; Trade Policy; Developing Countries
• Subjects: L - Industrial Organization > L2 - Firm Objectives, Organization, and Behavior > L25 - Firm Performance: Size, Diversification, and Scope; O - Economic Development, Innovation, Technological Change, and Growth > O2 - Development Planning and Policy > O24 - Trade Policy ; Factor Movement Policy ; Foreign Exchange Policy; F - International Economics > F1 - Trade > F14 - Empirical Studies of Trade

References

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