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Imports and TFP at the firm level: the role of absorptive capacity
Author(s) -
Augier Patricia,
Cadot Olivier,
Dovis Marion
Publication year - 2013
Publication title -
canadian journal of economics/revue canadienne d'économique
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.773
H-Index - 69
eISSN - 1540-5982
pISSN - 0008-4085
DOI - 10.1111/caje.12034
Subject(s) - total factor productivity , absorptive capacity , economics , capital equipment , matching (statistics) , capital (architecture) , productivity , propensity score matching , estimator , econometrics , panel data , labour economics , industrial organization , monetary economics , macroeconomics , statistics , mathematics , history , archaeology
This paper estimates the effect of the decision to import intermediate goods and capital equipment on Total Factor Productivity (TFP) at the firm level on a panel of Spanish firms (1991–2002). We use two alternative approaches. In the first, we estimate TFP and apply a diff‐in‐diff estimator with a control group constructed by propensity‐score matching. In the second, direct method, we estimate TFP with imported inputs as a state variable in one stage. Both approaches show that the effect of a firm's decision to source intermediates and capital equipment abroad on its TFP depends critically on its capacity to absorb technology, measured by the proportion of skilled labour.