TY  - BOOK
AU  - Goldberg,Pinelopi K.
AU  - Khandelwal,Amit
AU  - Pavcnik,Nina
AU  - Topalova,Petia
ED  - National Bureau of Economic Research.
TI  - Imported Intermediate Inputs and Domestic Product Growth: Evidence from India 
T2  - NBER working paper series
PY  - 2008///
CY  - Cambridge, Mass.
PB  - National Bureau of Economic Research
N1  - October 2008; Hardcopy version available to institutional subscribers
N2  - New goods play a central role in many trade and growth models. We use detailed trade and firm-level data from a large developing economy--India--to investigate the relationship between declines in trade costs, the imports of intermediate inputs and domestic firm product scope. We estimate substantial static gains from trade through access to new imported inputs. Accounting for new imported varieties lowers the import price index for intermediate goods on average by an additional 4.7 percent per year relative to conventional gains through lower prices of existing imports. Moreover, we find that lower input tariffs account on average for 31 percent of the new products introduced by domestic firms, which implies potentially large dynamic gains from trade. This expansion in firms' product scope is driven to a large extent by international trade increasing access of firms to new input varieties rather than by simply making existing imported inputs cheaper. Hence, our findings suggest that an important consequence of the input tariff liberalization was to relax technological constraints through firms' access to new imported inputs that were unavailable prior to the liberalization
UR  - https://www.nber.org/papers/w14416
UR  - http://dx.doi.org/10.3386/w14416
ER  -