-
Views
-
Cite
Cite
Kaleb Girma Abreha, Importing and Firm Productivity in Ethiopian Manufacturing, The World Bank Economic Review, Volume 33, Issue 3, October 2019, Pages 772–792, https://doi.org/10.1093/wber/lhx009
Close - Share Icon Share
Abstract
This paper investigates the causal relationship between importing and firm productivity. Using a rich dataset from Ethiopian manufacturing over the period 1996–2011, I find that most firms rely on production inputs from the world market. These firms are better performing as shown by significant, economically large import premia. I also find strong evidence of self-selection of more productive firms into importing which is indicative of sizable import market entry costs. To examine the causal effect of importing on firm productivity, I use a model in which the static and dynamic effects of importing are separately estimated. The estimation results provide support to learning-by-importing. However, the productivity gains are small in size compared to similar findings in other studies. I provide some evidence in support of firms’ limited absorptive capacity in explaining the small productivity gains.
