Discussion Paper

No. 2015-32 | April 27, 2015
Imported Inputs and Egyptian Exports: Exploring the Links


This paper is the first to explore the links between exporting and importing activities of Egyptian firms using panel data over the period from 2003 to 2007. The main aim is twofold. Firstly, the authors report regression results indicating that firms that both export and import are the most productive, followed by importing-, exporting-only firms and nontraders. Secondly, the authors estimate the determinants of the extensive and intensive margins of exports and imports using dynamic panel-Probit and panel-Tobit models in combination with the method proposed by Hesketh and Skrondal (2013) to tackle the initial conditions problem. Their results show that both activities present a high degree of hysteresis, which is higher for imports than for exports pointing to the existence of sunk costs in both activities. Moreover, past productivity does affect the extensive margin of imports, but not of exports and the initial condition status is also only relevant for the import side. Similar outcomes are obtained for the intensive margin of trade.

Data Set

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Cite As

María Dolores Parra and Inmaculada Martínez-Zarzoso (2015). Imported Inputs and Egyptian Exports: Exploring the Links. Economics Discussion Papers, No 2015-32, Kiel Institute for the World Economy. http://www.economics-ejournal.org/economics/discussionpapers/2015-32

Comments and Questions

Anonymous - Comments
May 14, 2015 - 16:21

Comments on “Imported Inputs and Egyptian Exports: Exploring the links”

This article deals with an interesting question, namely, the link between imported inputs and exports in the Egyptian case:
• The paper is a nice piece of research.
• The empirical work is interesting and econometrically robust.
• The authors ...[more]

... chose the appropriate methodology to answer his empirical question.
• The paper is very well-written.
• The question is well formulated and answered in a consistent way.

I detailed now some of the points that I find puzzling in the current version of the paper.

At the descriptive level:
• It is important to present the sectoral distribution of firms importing inputs (whether they are firms producing high or low value-added products)

At the empirical level:
• I think it is important to include a geographical variable showing whether the firm is located in Cairo or not. This is likely to have a significant impact on the probability of exporting.
• I am wondering why the authors do not include firm dummies to control for any unobserved characteristics of the firms.
• Since imported inputs might improve the quality of exports, it would be interesting to examine whether imported inputs help firms export
o to more than a destination or not (market extensive margin)
o to more than a product or not (product extensive margin)

Maria Dolores Parra - Answer
May 22, 2015 - 08:12

Thank you very much for taking the time to read our paper and for your great comments. Please find the responses attached.

Anonymous - Referee Report 1
May 27, 2015 - 07:56

see attached file

Maria Dolores Parra - Answer
June 06, 2015 - 11:02

Thank you very much for your great comments. Please find the responses attached.

Anonymous - Invited Reader Comment
July 09, 2015 - 11:31

see attached file

Anonymous - Referee Report 2
July 23, 2015 - 09:18

see attached file

Maria Dolores Parra - Answer
September 15, 2015 - 09:09

Please find attached our answer