Imports-ICT Linkage in Colombian Manufacturing

Abstract

The objective of this paper is to explore the ICT impact on firm’s import decision and on firm’s performance in import markets in Colombian manufacturing. This is the first document exploring this linkage in Latin America. We analyse firms’ imports of raw materials (not exports as the tradition) because of the decisive role imports play in firms’ exports. To deal with the problem of sample selection bias we replicate the Tobit II-Heckman procedure, by using a dynamic random effects probit model with panel data for decision process and a dynamic Generalized Linear Model (GLM) for performance process including Mills ratio. We include the influence of exports on imports, the initial conditions problem and the depreciation pattern of import experience. Our main results reveal a strong and direct impact of ICT on imports, especially for SMEs. Other results also suggest sunk costs/persistence, self-selection, cross-effects, and a decreasing import experience.