Does Input-Trade Liberalization Affect Firms' Foreign Technology Choice?

This paper studies the impact of input-trade liberalization on firms' decision to upgrade foreign technology embodied in imported capital goods. The empirical analysis is motivated by a simple theoretical framework of endogenous technology ado...

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Main Authors:	Bas, Maria, Berthou, Antoine
Format:	Working Paper
Language:	English en_US
Published:	World Bank, Washington, DC 2016
Subjects:	input trade trade liberalization capital goods imports technology diffusion
Online Access:	http://documents.worldbank.org/curated/en/889161478534043136/Does-input-trade-liberalization-affect-firms-foreign-technology-choice http://hdl.handle.net/10986/25683

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recordtype	oai_dc
spelling	okr-10986-256832021-06-08T14:42:46Z Does Input-Trade Liberalization Affect Firms' Foreign Technology Choice? Bas, Maria Berthou, Antoine input trade trade liberalization capital goods imports technology diffusion This paper studies the impact of input-trade liberalization on firms' decision to upgrade foreign technology embodied in imported capital goods. The empirical analysis is motivated by a simple theoretical framework of endogenous technology adoption, heterogeneous firms and imported inputs. The model predicts a positive effect of input tariff reductions on firms' technology choice to source capital goods from abroad. This effect is heterogeneous across firms depending on their initial productivity level. Relying on India's trade liberalization episode in the early 1990s, this paper demonstrates that the probability of importing capital goods is higher for firms producing in industries that have experienced greater cuts on tariffs on intermediate goods. Only those firms in the middle range of the initial productivity distribution have benefited from input-trade liberalization to upgrade their technology. 2016-12-05T23:35:56Z 2016-12-05T23:35:56Z 2016-11 Working Paper http://documents.worldbank.org/curated/en/889161478534043136/Does-input-trade-liberalization-affect-firms-foreign-technology-choice http://hdl.handle.net/10986/25683 English en_US Policy Research Working Paper;No. 7883 CC BY 3.0 IGO http://creativecommons.org/licenses/by/3.0/igo/ World Bank World Bank, Washington, DC Publications & Research Publications & Research :: Policy Research Working Paper South Asia India
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
language	English en_US
topic	input trade trade liberalization capital goods imports technology diffusion
spellingShingle	input trade trade liberalization capital goods imports technology diffusion Bas, Maria Berthou, Antoine Does Input-Trade Liberalization Affect Firms' Foreign Technology Choice?
geographic_facet	South Asia India
relation	Policy Research Working Paper;No. 7883
description	This paper studies the impact of input-trade liberalization on firms' decision to upgrade foreign technology embodied in imported capital goods. The empirical analysis is motivated by a simple theoretical framework of endogenous technology adoption, heterogeneous firms and imported inputs. The model predicts a positive effect of input tariff reductions on firms' technology choice to source capital goods from abroad. This effect is heterogeneous across firms depending on their initial productivity level. Relying on India's trade liberalization episode in the early 1990s, this paper demonstrates that the probability of importing capital goods is higher for firms producing in industries that have experienced greater cuts on tariffs on intermediate goods. Only those firms in the middle range of the initial productivity distribution have benefited from input-trade liberalization to upgrade their technology.
format	Working Paper
author	Bas, Maria Berthou, Antoine
author_facet	Bas, Maria Berthou, Antoine
author_sort	Bas, Maria
title	Does Input-Trade Liberalization Affect Firms' Foreign Technology Choice?
title_short	Does Input-Trade Liberalization Affect Firms' Foreign Technology Choice?
title_full	Does Input-Trade Liberalization Affect Firms' Foreign Technology Choice?
title_fullStr	Does Input-Trade Liberalization Affect Firms' Foreign Technology Choice?
title_full_unstemmed	Does Input-Trade Liberalization Affect Firms' Foreign Technology Choice?
title_sort	does input-trade liberalization affect firms' foreign technology choice?
publisher	World Bank, Washington, DC
publishDate	2016
url	http://documents.worldbank.org/curated/en/889161478534043136/Does-input-trade-liberalization-affect-firms-foreign-technology-choice http://hdl.handle.net/10986/25683
_version_	1764459887456157696

Does Input-Trade Liberalization Affect Firms' Foreign Technology Choice?

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