Working Paper: CEPR ID: DP13623
Authors: Gábor Békés; Péter Harasztosi
Abstract: In less developed economies import can be the primary source of adopting new technologies in the form of modern production equipment. This paper explores the spread of manufacturing machinery across locations and investigates the effects of previous importers on the firms' decision to import certain types of foreign machines. Using a uniquely compiled Hungarian firm-level dataset for the 1992-2003 period, we find that the probability of importing a particular piece of sector specific machinery is positively affected by the presence of local firms previously importing the same machine. A similar pattern is found with regards to the choice of source country. While these results offer evidence of positive externalities, we find that these benefits are concentrated in large and foreign owned companies.
Keywords: machine imports; impact of technology adoption; trade-related spillovers; agglomeration
JEL Codes: R12; F14; D22
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Presence of local firms that have previously imported the same machine (L64) | Probability of importing a specific piece of machinery (L64) |
| Each additional peer within 1 km (C92) | Probability of importing a specific piece of machinery (L64) |
| Presence of local firms that have previously imported the same machine (L64) | Choice of source country for the imported machine (F29) |
| Probability of importing a specific piece of machinery (L64) | Positive externalities from local knowledge spillovers (O36) |
| Presence of local firms that have previously imported the same machine (L64) | Likelihood of new firms deciding to import those machines (L64) |