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- W2760519364 abstract "Abstract Producers that use imported intermediate goods tend to be much larger and more productive than others. Some of this is due to a selection effect: the most productive producers self‐select into importing because only they can overcome the fixed costs of developing trade relationships with foreign input suppliers. Some of this is due to a technology effect: any given producer would have higher variable profits from operating the technology using imported intermediate goods. To account for the roles of these theoretical mechanisms, we develop a simple model of a competitive small open economy in which heterogeneous firms endogenously decide whether to use imported intermediate goods. The technology that uses imported intermediate goods is superior but requires a higher fixed cost of operating. The calibrated model captures the large performance advantage of importers and quantifies the selection and technology effects." @default.
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- W2760519364 date "2017-09-26" @default.
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- W2760519364 title "Using imported intermediate goods: Selection and technology effects" @default.
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- W2760519364 doi "https://doi.org/10.1111/roie.12325" @default.
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