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The role of imports in the intensive margin of exports

Author

Listed:
  • Francisco Requena

    (Universitat de València, Valencia, Spain)

  • Guadalupe Serrano

    (Universitat de València, Valencia, Spain)

  • Raúl Mínguez

    (Chamber of Commerce of Spain & Universidad Nebrija, Madrid, Spain)

Abstract
We investigate the impact of imports of intermediate inputs on export value and scope among Spanish regular two-way trade manufacturing firms over the period 1997-2018. After controlling for firm characteristics and addressing endogeneity using an IV strategy, we find that firms that import intermediate inputs from non-EUEFTA countries enhance the volume and scope of their EU15 exports. The impact was higher when firms imported intermediate inputs from the high-income non-EUEFTA countries before the 2008 financial crisis. However, since 2008, purchase of intermediate inputs from the low-income non-EUEFTA countries become as relevant as those from high income countries. We interpret this apparently surprising result as the optimal response of Spanish firms to diversify their import portfolio as a consequence of an increase in the product upgrading and quality improvement of cheaper intermediate inputs from developing countries after the crisis.

Suggested Citation

  • Francisco Requena & Guadalupe Serrano & Raúl Mínguez, 2022. "The role of imports in the intensive margin of exports," Working Papers 2206, Department of Applied Economics II, Universidad de Valencia.
    • Handle: RePEc:eec:wpaper:2206
    as

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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Firm-level data; exports value; firm scope; imports of intermediate inputs; origin of imports; pre and post-crisis;
    All these keywords.

    JEL classification:

    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • L25 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Firm Performance

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