DP13623 Machine imports, technology adoption and local spillovers

Author(s): Gábor Békés, Péter Harasztosi
Publication Date: March 2019
Date Revised: March 2019
Keyword(s): agglomeration, impact of technology adoption, machine imports, trade-related spillovers
JEL(s): D22, F14, R12
Programme Areas: International Trade and Regional Economics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=13623

In less developed economies import can be the primary source of adopting new technologies in the form of modern production equipment. This paper explores the spread of manufacturing machinery across locations and investigates the effects of previous importers on the firms' decision to import certain types of foreign machines. Using a uniquely compiled Hungarian firm-level dataset for the 1992-2003 period, we find that the probability of importing a particular piece of sector specific machinery is positively affected by the presence of local firms previously importing the same machine. A similar pattern is found with regards to the choice of source country. While these results offer evidence of positive externalities, we find that these benefits are concentrated in large and foreign owned companies.