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Quarterly Journal of Economics Vol. 125 No. 4 2010

Imported Intermediate Inputs and Domestic Product Growth: Evidence from India

P. K. Goldberg1,2,3,4,5; Ankur Khandelwal1,2,3,4,5; N. Pavcnik1,2,3,4,5; P. Topalova1,2,3,4,5

1 Dartmouth College · 2 International Monetary Fund · 3 National Bureau of Economic Research · 4 Princeton University · 5 Columbia University

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Abstract

New goods play a central role in many trade and growth models. We use detailed trade and firm-level data from India to investigate the relationship between declines in trade costs, imports of intermediate inputs, and domestic firm product scope. We estimate substantial gains from trade through access to new imported inputs. Moreover, we find that lower input tariffs account on average for 31% of the new products introduced by domestic firms. This effect is driven to a large extent by increased firm access to new input varieties that were unavailable prior to the trade liberalization.

DOI
10.1162/qjec.2010.125.4.1727
Volume
125
Issue
4
Pages
1727-1767
Language
en
Sources
openalex crossref bibtex:phds-export.bib

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