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Imported Inputs and Productivity

Halpern, László, Koren, Miklós, Szeidl, Adam·2015·American Economic Review

Abstract

We estimate a model of importers in Hungarian microdata and conduct counterfactual analysis to investigate the effect of imported inputs on productivity. We find that importing all input varieties would increase a firm’s revenue productivity by 22 percent, about one-half of which is due to imperfect substitution between foreign and domestic inputs. Foreign firms use imports more effectively and pay lower fixed import costs. We attribute one-quarter of Hungarian productivity growth during the 1993–2002 period to imported inputs. Simulations show that the productivity gain from a tariff cut is larger when the economy has many importers and many foreign firms. (JEL D24, F13, F14, L60)

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Metadata

Authors
Halpern, L., Koren, M., & Szeidl, A.
Venue
American Economic Review
Published
2015-12-01
Volume
105
Issue
12
Pages
3660-3703
ISSN
0002-8282 (ISSN-L)
OpenAlex
W2256159506
Cited by
967
References
2
FWCI
176.42
Type
journal article
Language
en
Open access
closed

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Halpern, L., Koren, M., & Szeidl, A. (2015). Imported Inputs and Productivity. American Economic Review. https://doi.org/10.1257/aer.20150443

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