The enhancing effect of imports of intermediate inputs on firms' exports

Abstract

We investigate the impact of imports of intermediate inputs on export value and portfolio among Spanish regular two-way trade of manufacturing firms over the period 1997–2018. After controlling for firm characteristics and addressing endogeneity, we find that firms that import intermediate inputs from non-EUEFTA countries enhance the volume and scope of their EU15 exports. The magnitude of the impact is similar for high-income countries and low-income countries and there are no changes in sourcing patterns before or after the financial crisis.