5. CONCLUSION
Using a novel database that combines company tax information with detailed transaction-level data, we provide support for the idea that importing a wide range of intermediate inputs, especially from advanced countries, is associated with a higher likelihood of exporting and greater scope, scale and value of exports. Among the main mechanisms explored are the complementarities with domestic inputs on the one side, and the opportunity to exploit the knowledge and technologies embedded in new imports on the other. Our results are consistent with a range of existing evidence for both advanced and emerging countries and confirm the potential spillovers from international trade.
Broadly, our results are consistent with the idea that imports can play a key role in encouraging firms to produce for the international market. This has important implications for developing countries in which unemployment remains an important concern and access to knowledge and technologies is a main objective to enhance private sector development. The literature has established that exporters tend to be larger, more productive and pay higher wages than domestic firms. Boosting the integration of manufacturing firms into foreign markets can therefore provide an opportunity for raising employment and aggregate productivity. Our study argues that ensuring access for domestic firms to a variety of intermediate inputs from abroad can be crucial to achieving this end and can contribute to economic development.
On this respect, it is important to remark, also in view of future research on this topic, that the results of our work are somewhat conservative. Our study focuses only on firms that import and export directly. It ignores the influence that imports may have on exports via other channels such as the purchase of imports through third-party transactions and the use of import-competing domestic substitutes. Our study therefore captures a narrow dimension of the full potential effect of imported intermediates on firm export performance.