Imports, Productivity and Origin Markets: The Role of Knowledge‐intensive Economies

Abstract

Abstract We investigate the impact of international knowledge transfers on productivity at the firm level. The flow of knowledge across borders is measured through imports from different markets. Using a dynamic panel GMM estimation on Swedish manufacturing firms with 10 or more employees over the period 1997–2004, three important results emerge. First, there is an instantaneous positive effect of imports on productivity. Second, the evidence points towards a distinct role of imports from the G7 countries, which accounts for 80 per cent of global R&D. Third, sensitivity analyses show that G7 imports are also important for small and non‐affiliated firms.

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