Executive Summary

Intensified competition in the input market can yield significant advantages for firms’ competitiveness. A greater abundance of intermediate inputs can grant companies enhanced access to cost-effective, high-quality, and technologically advanced resources, as well as a wider spectrum of input options. Consequently, this increases the likelihood of companies diversifying their product offerings and enhances their overall product quality.
Intermediate input can take different forms. In the context of the food industry, inputs commonly refer to raw agricultural materials. Nevertheless, it’s important to note that the managerial skills of employees and the organizational capabilities of firms can also be seen as a form of intermediate input. This study aims to explore the connection between imported inputs and the performance of food companies, with a primary focus on productivity and export activities. This research objective is addressed from both theoretical and empirical perspectives, encompassing four key contributions, one in each corresponding chapter.
The first chapter introduces a novel trade model in which the quality of food products depends on the quality of agricultural inputs, and companies vary in terms of their labor-augmenting technological processes. This contribution provides evidence that a reduction in input prices yields several effects: without trade, less productive firms may exit the market, leading to improved overall welfare through lower final product prices and more efficient resource allocation. Additionally, when labor productivity is high, and intermediate product costs constitute a substantial portion of total expenses, high-productivity companies may choose to produce lower-quality goods under certain conditions. Furthermore, lower tariffs on high-quality inputs offer greater advantages to less productive firms.
The second chapter delves into the impact of increased imports of intermediate inputs on both the quality of exported products and the diversification of the range of final goods exported. This analysis draws upon comprehensive trade and firm-level data from Italy, spanning the period from 2012 to 2020. The research uncovers a robust and positive correlation between the diversity of imported intermediate inputs and the quality of exported products. Furthermore, the findings suggest that the influx of imported intermediate inputs has a favourable impact on the variety of final products exported.

The third chapter explores how a company’s quality policies influence its export performance. The commitment of firms to product reliability and safety is assessed by examining the presence of quality management personnel, utilizing employee-firm-level data from French administrative sources. The study reveals that companies employing quality management staff tend to achieve greater market penetration and export larger quantities, particularly in markets with stringent standards, including heightened sanitary, phytosanitary, or technical requirements.
The final chapter sheds new light on the export activities of companies in the Central Eastern European region. This study provides insights into how firms conduct exports in a relatively underexplored region, underscoring the significance of considering product-specific factors. The main results suggest that firms with foreign parent firms are more likely to survive in terms of trade duration. Moreover, the level of income of the partner country, neighbouring countries, regional trade agreements (RTAs) increase the duration of trade at the product-firm level. In the full model, controlling for product- and county-level fixed effects, distance reduces the probability of survival, while the EU membership per se has no effect.