Imported Inputs and Export Performance: A Gravity Analysis

Based on input/output tables that contain disaggregated data from 45 industries grouped into 16 sectors from 1995 to 2020 across 66 countries, we carry out a gravity analysis to examine how imported inputs affect bilateral exports. In terms of econometric methodology, we use pseudo Poisson maximum likelihood (PPML) as well as Instrumental-Variable Tobit methods. Our results consistently show a positive and significant effect of imported inputs on bilateral exports. JEL Codes: F10, F40