Imports of capital goods and enterprise performance : a firm-level analysis in China

Much recent research on openness and productivity has shifted attention away from regions and countries to firms. Most of those studies have focused on exports and productivity. However, empirical study on the relationship between imports and productivity with firm-level data is scarce. This note attempts to help fill this gap using firm-level data in China. Controlling firms' other characteristics, we find that firms with imports of capital goods have higher productivity. It implies that, in a developing country, firms utilizing foreign products, which embody foreign technologies, have better performance than those only using domestic technologies.