This paper explores how internal technological capabilities influence the relationship between imported inputs and the export performance of firms. We apply threshold regression techniques to a representative dataset of Brazilian firms and find a strong positive influence of innovation skills on the relationship between imported intermediates and export revenues. Complementarities between capabilities and importing are found only for high-quality imports and are stronger for exports of products with a higher scope for quality differentiation. We also observe that technological capabilities are directly correlated with export performance, confirming the view that innovation positively influences firms' international competitiveness.
- o33 - "Technological Change: Choices and Consequences; Diffusion Processes"
- o40 - Economic Growth and Aggregate Productivity: General
- o32 - Management of Technological Innovation and R&D
- f14 - Empirical Studies of Trade
- Export performance
- Export products
- Export revenues
- High quality
- Imported intermediates
- International competitiveness
- Quality differentiation
- Technological capabilities
- Technological capability
- Threshold regressions
- INPUT-TRADE LIBERALIZATION