UNU-MERIT Working Papers Series
Imported intermediates, technological capabilities and exports: Evidence from Brazilian firm-level data
Caio Torres Mazzi & Neil Foster-McGregor #2019-028This paper explores how technological capabilities influence the
relationship between imported inputs and the export performance of
firms. We apply threshold regression techniques to a representative
dataset of Brazilian firms and find a strong positive influence of
innovation skills on the relationship between imported intermediates and
export revenues. We further find that the complementarities between
importing and exporting are stronger for firms that export products with
a higher scope for quality differentiation. We also observe that
technological capabilities are directly correlated with export
performance, confirming the view that innovation positively influences
firms' international competitiveness. This relationship is not found to
be significant for firms that export products with a low scope for
quality differentiation and that export to lower income non-OECD
markets. Overall, our results suggest that technological capabilities
and the quality of imported inputs not only benefit firms directly but
also complement each other in enhancing export competitiveness.
Keywords: imports; exports; productivity; innovation; technological
capabilities
JEL Classification: F14, O30
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