Journal of Korea Trade

Korea Trade Research Association (한국무역학회)
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Importing and Firm Productivity: Evidence from Korean Manufacturing Firms

  • Heechul Min (Department of International Economics and Law, Hankuk University of Foreign Studies)
  • Received : 2022.03.15
  • Accepted : 2022.05.06
  • Published : 2022.05.31
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Abstract

Purpose - This paper empirically investigates the relationship between firm productivity and importing intermediate inputs in the Korean manufacturing sector. Design/methodology - This paper tests the two related hypotheses on the relationship between importing and productivity for a sample of Korean manufacturing firms. We test the self-selection hypothesis by comparing pre-entry levels of productivity between importers and non-importers. We test the learning-by-importing hypothesis by employing propensity score matching with differencein-differences approach. Findings - Future importers are more productive than future non-importers years before they start to import, which supports the self-selection hypothesis. In contrast, there is no strong evidence for learning-by-importing. Originality/value - This paper is the first study to explore the relationship between importing and firm-level productivity for Korean firms. The results have an important implication on trade policies to lower or raise trade barriers in imported inputs.

Keywords

Acknowledgement

This work was supported by Hankuk University of Foreign Studies Research Fund.

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