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How the breadth and depth of import relationships affect the performance of Canadian manufacturers

M. Bombardini,K. Head,Maria D. Tito,Ruoying Wang

Published 2022 in Canadian Journal of Economics/Revue canadienne d'économique

ABSTRACT

This paper examines the relationship between a manufacturing firm's import behavior and its performance. The focus is on two aspects of imports, input variety and the dynamics of import relationships. Using identification conditions borrowed from the production function estimation literature, we show that firms importing more products from a larger set of suppliers tend to be larger, more productive, and more successful in export markets. Not only the number, but also the duration of supply relationships matter. Firms maintaining a higher share of continuous supply relationships also benefit from size and productivity effects. These results suggest that the breadth and depth of the import network are relevant factors for the performance of Canadian manufacturers, underscoring the importance of pursuing trade liberalizations with new partners and trade facilitation with established sources of suppliers.

PUBLICATION RECORD

  • Publication year

    2022

  • Venue

    Canadian Journal of Economics/Revue canadienne d'économique

  • Publication date

    2022-02-02

  • Fields of study

    Business, Economics

  • Identifiers
    DOI 10.1111/caje.12559
  • External record

    Open on Semantic Scholar

  • Source metadata

    Semantic Scholar

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