Importing and firm performance: New evidence from South Africa

This paper uses firm-level data from company tax declarations to analyse the complementary relationship between direct access to imported intermediate inputs and manufacturing firm performance in South Africa. There are three main findings. The first is on firm heterogeneity, showing that importers consistently demonstrate premiums in terms of productivity, employment, wages, and capital intensity in production compared to firms that do not trade. The second supports the hypothesis of firm learning by importing. Finally, we show that importing also has implications for exporting, especially if inputs are sourced from advanced economies.