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Inventories, Input Costs, and Productivity Gains from Trade Liberalizations (English)

Sourcing internationally entails additional costs due to larger per inventory holdings. When firms switch toward foreign sources, these unobserved costs increase. This paper revisits the effect of trade liberalization on firms’ productivity taking into account the inventory premium of importing and input cost heterogeneity. Through model simulations, the paper shows that in the presence of inventory holding costs, their omission in revenue-based productivity...
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Khan,Shafaat Yar; Khederlarian, Armen.

Inventories, Input Costs, and Productivity Gains from Trade Liberalizations (English). Policy Research working paper|no. WPS 9564 Washington, D.C. : World Bank Group. http://documents.worldbank.org/curated/en/157191614780662715

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