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Openness, Intermediate Imports and Growth

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  • Kopp, Andreas

Abstract

We consider two channels via which foreign inputs into industrial production may lead to productivity effects. The first one concerns dynamic externalities between firms which share technical and organizational knowledge which is vital for the productivity growth of a particular industry. We show by which institutional mechanism firms are able to share proprietary knowledge which is of economic value for the competitor. An increase of the number of cooperating firms due to foreign direct investments leads to growth effects. The second channel of growth effects resulting from openness is derived from an increase of the imports of physical inputs due to a greater variety of inputs for final goods production.

Suggested Citation

  • Kopp, Andreas, 2000. "Openness, Intermediate Imports and Growth," Kiel Working Papers 996, Kiel Institute for the World Economy (IfW Kiel).
    • Handle: RePEc:zbw:ifwkwp:996
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    File URL: https://www.econstor.eu/bitstream/10419/17700/1/kap996.pdf
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    More about this item

    Keywords

    North-South trade; FDI; intermediate goods;
    All these keywords.

    JEL classification:

    • O19 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • F23 - International Economics - - International Factor Movements and International Business - - - Multinational Firms; International Business
    • F21 - International Economics - - International Factor Movements and International Business - - - International Investment; Long-Term Capital Movements
    • F12 - International Economics - - Trade - - - Models of Trade with Imperfect Competition and Scale Economies; Fragmentation

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