Navas, A., Serti, F. and Tomasi, C. (2013) Intermediate inputs and the export gravity equation. Research Report. Department of Economics, University of Sheffield ISSN 1749-8368
Abstract
This paper introduces imports in intermediate inputs into a standard heterogeneous firms model of trade with asymmetric countries. The model highlights how imports from a specific country affects a firm's decision to export to that country (the extensive margin), as well as its export value (the intensive margin). The model shows that the effect of both distance and market size on the export margins is magnified when imports in intermediates are accounted for. Indeed, to the extent that exporting firms also use foreign intermediate inputs, the impact of traditional gravity forces on exports also depends on import activities. Exploiting data on product-destination level transactions of a large panel of Italian firms, the paper provides empirical evidence in support of the predictions of the model. Controlling for firm-level time-varying unobserved heterogeneity and for the potential endogeneity of firm-level import decisions, the empirical analyses confirm that the estimated elasticities of exports to distance and market size depend on firms' importing activities.
Metadata
Item Type: | Monograph |
---|---|
Authors/Creators: |
|
Copyright, Publisher and Additional Information: | The Sheffield Economics Research Paper (SERP) series offers a forum for the research output of the academic staff and research students of the Department of Economics, University of Sheffield. Papers are reviewed for quality and presentation by a departmental editor. However, the contents and opinions expressed remain the responsibility of the authors. All papers may be downloaded free on the understanding that the contents are preliminary and therefore permission from the author(s) should be sought before they are referenced. |
Keywords: | imports; exports; firm heterogeneity; gravity equation; |
Dates: |
|
Institution: | The University of Sheffield |
Academic Units: | The University of Sheffield > Faculty of Social Sciences (Sheffield) > Department of Economics (Sheffield) > Sheffield Economics Research Papers Series |
Depositing User: | Miss Anthea Tucker |
Date Deposited: | 11 Nov 2013 13:24 |
Last Modified: | 24 Oct 2016 17:55 |
Status: | Published |
Publisher: | Department of Economics, University of Sheffield |
Identification Number: | 2013014 |
Open Archives Initiative ID (OAI ID): | oai:eprints.whiterose.ac.uk:77015 |