The Chinese are here: import penetration and firm productivity in sub-Saharan Africa

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The Chinese are here : import penetration and firm productivity in sub-Saharan Africa. / Darko, Christian; Vanino, Enrico; Occhiali, Giovanni.

In: Journal of Development Studies, 04.08.2021.

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@article{d52ba36e50b44dd4903cb53a60ec4d65,
title = "The Chinese are here: import penetration and firm productivity in sub-Saharan Africa",
abstract = "This study presents the first micro-level analysis of the causal effect of Chinese import penetration on firm productivity in 24 sub-Saharan Africa (SSA) countries. We make key contributions to the literature by examining the heterogeneous effects of Chinese imports on firm productivity using data on transport infrastructure, and by distinguishing between import competition and import of intermediate inputs. Two instrumental variables, one based on exogenous geographic characteristic of ports and transportation technology shock, and the other based on a supply-side shock, are constructed to address the endogeneity of import penetration. The results indicate that imports from China impact positively on firm productivity, mainly through imports of intermediate inputs, and there is significant heterogeneity of these effects in terms of firms{\textquoteright} proximity to ports and initial productivity level. Overall, our findings suggest that Chinese imports could be viewed as an opportunity for Sub-Sahara Africa firms to enhance their productivity. Furthermore, they highlight the need for developing countries to invest in transport infrastructure to effectively promote firms participation in international markets. ",
keywords = "Import penetration, productivity heterogeneity, trade infrastructure, sub-Saharan Africa, China",
author = "Christian Darko and Enrico Vanino and Giovanni Occhiali",
year = "2021",
month = aug,
day = "4",
doi = "10.1080/00220388.2021.1956468",
language = "English",
journal = "Journal of Development Studies",
issn = "0022-0388",
publisher = "Taylor & Francis",

}

RIS

TY - JOUR

T1 - The Chinese are here

T2 - import penetration and firm productivity in sub-Saharan Africa

AU - Darko, Christian

AU - Vanino, Enrico

AU - Occhiali, Giovanni

PY - 2021/8/4

Y1 - 2021/8/4

N2 - This study presents the first micro-level analysis of the causal effect of Chinese import penetration on firm productivity in 24 sub-Saharan Africa (SSA) countries. We make key contributions to the literature by examining the heterogeneous effects of Chinese imports on firm productivity using data on transport infrastructure, and by distinguishing between import competition and import of intermediate inputs. Two instrumental variables, one based on exogenous geographic characteristic of ports and transportation technology shock, and the other based on a supply-side shock, are constructed to address the endogeneity of import penetration. The results indicate that imports from China impact positively on firm productivity, mainly through imports of intermediate inputs, and there is significant heterogeneity of these effects in terms of firms’ proximity to ports and initial productivity level. Overall, our findings suggest that Chinese imports could be viewed as an opportunity for Sub-Sahara Africa firms to enhance their productivity. Furthermore, they highlight the need for developing countries to invest in transport infrastructure to effectively promote firms participation in international markets.

AB - This study presents the first micro-level analysis of the causal effect of Chinese import penetration on firm productivity in 24 sub-Saharan Africa (SSA) countries. We make key contributions to the literature by examining the heterogeneous effects of Chinese imports on firm productivity using data on transport infrastructure, and by distinguishing between import competition and import of intermediate inputs. Two instrumental variables, one based on exogenous geographic characteristic of ports and transportation technology shock, and the other based on a supply-side shock, are constructed to address the endogeneity of import penetration. The results indicate that imports from China impact positively on firm productivity, mainly through imports of intermediate inputs, and there is significant heterogeneity of these effects in terms of firms’ proximity to ports and initial productivity level. Overall, our findings suggest that Chinese imports could be viewed as an opportunity for Sub-Sahara Africa firms to enhance their productivity. Furthermore, they highlight the need for developing countries to invest in transport infrastructure to effectively promote firms participation in international markets.

KW - Import penetration

KW - productivity heterogeneity

KW - trade infrastructure

KW - sub-Saharan Africa

KW - China

U2 - 10.1080/00220388.2021.1956468

DO - 10.1080/00220388.2021.1956468

M3 - Article

JO - Journal of Development Studies

JF - Journal of Development Studies

SN - 0022-0388

ER -