Are importing and exporting complements or substitues in an emerging economy? The case of Colombia

Andrés Mauricio Gómez-Sánchez, Juan A. Mañez and Juan A. Sanchis
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Andrés Mauricio Gómez-Sánchez: Universidad del Cauca and Universitat de València
Juan A. Sanchis: Universitat de València and ERICES

No 2106, Working Papers from Department of Applied Economics II, Universidad de Valencia

Abstract: The aim of this paper is investigating the impact of two firm trading strategies (exporting and importing) on total factor productivity (TFP) and the potential complementarity/substitutability effects of these strategies. To assess these effects, we obtain robust estimates of TFP using a GMM approach that explicitly reckons the ability of firms’ trading experience to affect productivity. We use data for Colombian manufacturing firms from the Annual Manufacturing Survey spanning from 2007-2016. Our estimations results suggest that, regardless of the technological intensity of the industry in which the firm operates, active trading strategies (only exporting, only importing, both importing and exporting) pay positive rewards in terms of productivity. Nevertheless, whilst we find positive synergies (complementary) between exporting and importing for firms in med-high tech sectors, for firms operating in low-tech and med-low tech sectors, importing and exporting appear to be substitutes.

Keywords: imports; export; productivity; complementarity; substitutability (search for similar items in EconPapers)
JEL-codes: D24 F14 (search for similar items in EconPapers)
Date: 2021-05
New Economics Papers: this item is included in nep-bec, nep-eff, nep-int and nep-sbm
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Journal Article: Are importing and exporting complements or substitutes in an emerging economy? The case of Colombia (2022)
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