Two-way traders: searching for complementarities between exports and imports in a developing country

ABSTRACT

The international trade literature has extensively analysed the role of exports and imports as productivity shifters. However, most studies analyse one of these two activities in isolation, and empirical evidence on this matter to a large extent refers to developed countries. We analyse the relevance of the interaction between exports and imports to determine productivity by applying a test of complementarity between these activities for a developing country. Using firm-level data from Ecuador, we find evidence suggesting that there is complementarity between exports and imports in determining productivity.

KEYWORDS:

• Exports
• imports
• productivity
• complementarity

JEL CLASSIFICATION:

• F14
• D24
• F10

Acknowledgments

The authors thank an anonymous referee for useful comments.

Disclosure statement

No potential conflict of interest was reported by the authors.

Notes

¹ We perform our estimations using the prodest command of Stata, developed by Rovigatti and Mollisi (2018).

² We include the four mutually exclusive dummy variables in the regression, but do not include a constant term.

³ The deflators are based on the industry-specific price index and the price index for equipment at the industry level provided by the Ecuadorian National Institute of Statistics.

Additional information

Funding

This work was supported by the Spanish Ministry of Economy and Competitiveness [Project ECO2017-82445-R].