Imported Intermediate Inputs and Plants’ Export Dynamics Evidence from Indonesian Plant-product-level Data

This paper asks the question of whether the use of imported intermediate inputs leads to an expansion of plant-level export scope. Using a panel dataset constructed from Indonesian plant-product-level data, the number of plant exports is regressed on the number of intermediate inputs imported by the plant. The results of the instrumental variable estimation support the hypothesis that importing leads to export expansion. The results also indicate that importing intermediate inputs from East Asian countries promotes the expansion of export to advanced countries.

ERIA-DP-2018-13