The role of intermediate inputs and equipment imports in dynamic gains from trade

This chapter examines the impact of the import of intermediate inputs and capital goods on firm-level productivity. It also systematically explores the specific impacts of nontrade, or complementary, policies on firms’ ability to realise dynamic gains. Access to skilled labour is a particularly important policy variable with respect to the import of intermediate goods, followed by access to finance, while macroeconomic stability slightly outranks access to finance for capital goods importers. The importance of access to finance has particular policy significance given the wide-spread financial reforms being discussed or underway.