Date of Original Version
9-2006
Type
Article
Published In
World Development Volume 35, Issue 7, July 2007, Pages 1134-1151
Abstract or Table of Contents
We present evidence that importing is a source of international technology transfer. Using a detailed panel of Indonesian manufacturers, our analysis shows that firms in industries supplying increasingly import-intensive sectors have higher productivity growth than other firms. This finding suggests that linkages through vertical supply relationships are the channel through which import-driven technology transfer occurs. To our knowledge, these are the first firm-level results showing that downstream imports play a role in productivity gains. Together with the literature linking FDI and exporting to technology spillovers, the results provide a third component to the argument that trade and openness promote economic growth.