Kiel Working Papers, Kiel Institute for World Economics
No 996:
Openness, Intermediate Imports and Growth
Andreas Kopp
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.
Keywords: North-South trade, FDI, intermediate goods; (follow links to similar papers)
JEL-Codes: F12; F21; F23; O19; O31; (follow links to similar papers)
72 pages, August 2000
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