Imported Intermediate Inputs and Firms’ Productivity Growth: Evidence from the Food Industry

Abstract

Imported goods play a central role in determining the gains from trade. Using detailed trade and firm‐level data for Italy and France, we investigate the relationship between trade integration, imported intermediate inputs and firm performance in the food industry. Our main findings show that an increase in import competition spurs firm‐level productivity growth. Furthermore, the productivity growth effect attributable to imported intermediate inputs is significantly stronger than the effect due to imported final products. In addition, we find that new imported inputs are of particular importance, especially for Italian food firms, though less so for the French firms. Finally, the productivity growth effect of trade integration tends to be asymmetric across firms: more productive firms gain more from trade integration. These stylised facts have interesting policy implications.

Sector-Wide and Country-Specific Drivers of Firm Performance in the Visegrad Group Dairy Industry

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Importing Inputs for Climate Change Mitigation: The Case of Agricultural Productivity

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How Competitive is the EU's Agri‐Food Sector? An Introduction to a Special Feature on EU Agri‐Food Competitiveness

“…Olper et al . () investigate the possible links between trade (specifically in inputs to the agri‐food system) and firm productivity. They ask whether increases in imported intermediate inputs improve domestic firms’ productivity performance.…”

“…The direction of causality between supply-side factors in export quality specialisation and demand-side factors that relate to the quality of importsalong with the role of incomes and income inequalitiesare issues for further research'. Olper et al (2017) investigate the possible links between trade (specifically in inputs to the agri-food system) and firm productivity. They ask whether increases in imported intermediate inputs improve domestic firms' productivity performance.…”

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