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Imported input varieties and product innovation: Evidence from five developing countries
Author(s) -
Bos Marijke J.D.,
Vannoorenberghe Gonzague
Publication year - 2019
Publication title -
review of international economics
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.513
H-Index - 58
eISSN - 1467-9396
pISSN - 0965-7576
DOI - 10.1111/roie.12387
Subject(s) - product (mathematics) , developing country , quality (philosophy) , product innovation , business , survey data collection , industrial organization , economics , new product development , marketing , international trade , economic growth , mathematics , philosophy , statistics , geometry , epistemology
We examine how access to imported intermediate inputs affects firm‐level product innovation in five developing counties. We combine trade data with survey data on innovation and develop a method to determine whether new inputs were essential for the product innovation. We find evidence that the number of newly imported varieties has a significant impact on product innovations that rely on new inputs and provide suggestive evidence that this effect comes from access to better quality imports. We extend our analysis to assess the consequences of the increase in the number of Chinese exporting firms on product innovation in developing countries.