Importing and Firm Productivity in Ethiopian Manufacturing

Abreha, Kaleb Girma

doi:10.1093/wber/lhx009

Publication: Importing and Firm Productivity in Ethiopian Manufacturing

cbn

Files in English

English PDF (317.6 KB)

489 downloads

Date

2019-10

ISSN

1564-698X

Published

2019-10

Author(s)

Abreha, Kaleb Girma

Abstract

This paper investigates the causal relationship between importing and firm productivity. Using a rich dataset from Ethiopian manufacturing over the period 1996–2011, I find that most firms rely on production inputs from the world market. These firms are better performing as shown by significant, economically large import premia. I also find strong evidence of self-selection of more productive firms into importing which is indicative of sizable import market entry costs. To examine the causal effect of importing on firm productivity, I use a model in which the static and dynamic effects of importing are separately estimated. The estimation results provide support to learning-by-importing. However, the productivity gains are small in size compared to similar findings in other studies. I provide some evidence in support of firms’ limited absorptive capacity in explaining the small productivity gains.

Citation

“Abreha, Kaleb Girma. 2019. Importing and Firm Productivity in Ethiopian Manufacturing. World Bank Economic Review. © Published by Oxford University Press on behalf of the World Bank. http://hdl.handle.net/10986/35433 License: CC BY-NC-ND 3.0 IGO.”