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. Our empirical analysis is motivated by a simple theoretical framework of endogenous technology adoption, heterogeneous firms and imported inputs. The model...

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Bibliographic Details
Main Authors:	Bas, Maria, Berthou, Antoine
Format:	Journal Article
Published:	Published by Oxford University Press on behalf of the World Bank 2018
Subjects:	INPUT TRADE TRADE LIBERALIZATION CAPITAL GOODS IMPORTS TECHNOLOGY ADOPTION TECHNOLOGY DIFFUSION FIRM PRODUCTIVITY
Online Access:	http://hdl.handle.net/10986/30956

id	okr-10986-30956
recordtype	oai_dc
spelling	okr-10986-309562021-05-25T10:54:35Z Does Input-Trade Liberalization Affect Firms’ Foreign Technology Choice? Bas, Maria Berthou, Antoine INPUT TRADE TRADE LIBERALIZATION CAPITAL GOODS IMPORTS TECHNOLOGY ADOPTION TECHNOLOGY DIFFUSION FIRM PRODUCTIVITY This paper studies the impact of input-trade liberalization on firms’ decision to upgrade foreign technology embodied in imported capital goods. Our 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, we demonstrate 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. 2018-12-06T17:47:33Z 2018-12-06T17:47:33Z 2017-06-01 Journal Article World Bank Economic Review 1564-698X http://hdl.handle.net/10986/30956 CC BY-NC-ND 3.0 IGO http://creativecommons.org/licenses/by-nc-nd/3.0/igo World Bank Published by Oxford University Press on behalf of the World Bank Publications & Research :: Journal Article Publications & Research South Asia India
repository_type	Digital Repository
institution_category	Foreign Institution
institution	Digital Repositories
building	World Bank Open Knowledge Repository
collection	World Bank
topic	INPUT TRADE TRADE LIBERALIZATION CAPITAL GOODS IMPORTS TECHNOLOGY ADOPTION TECHNOLOGY DIFFUSION FIRM PRODUCTIVITY
spellingShingle	INPUT TRADE TRADE LIBERALIZATION CAPITAL GOODS IMPORTS TECHNOLOGY ADOPTION TECHNOLOGY DIFFUSION FIRM PRODUCTIVITY Bas, Maria Berthou, Antoine Does Input-Trade Liberalization Affect Firms’ Foreign Technology Choice?
geographic_facet	South Asia India
description	This paper studies the impact of input-trade liberalization on firms’ decision to upgrade foreign technology embodied in imported capital goods. Our 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, we demonstrate 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	Journal Article
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	Published by Oxford University Press on behalf of the World Bank
publishDate	2018
url	http://hdl.handle.net/10986/30956
_version_	1764473265164648448

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

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