sometimes multiple times depending on the number of agency inspections, with direct costs charged to the importer and higher risks of deterioration for perishable goods. As in previous steps, the quality of the port physical infrastructure and efficiency of port operators in moving the cargo, as well as their limited use of IT systems to efficiently allocate containers, can also generate delays (even for non-intrusive inspection methods based on x-rays). In addition, delays can occur as the importer or its representative must be physically present during any physical inspection. Also, rent-seeking practices, including informal payments to obtain a modification of the Customs classification or valuation of the imported good, or to limit or altogether avoid sample testing can occur at this stage considering the multiple stakeholders involved in the clearance process. In a final step,<sup>14</sup> Customs clear the shipment once all border control agencies have provided their clearance and the importer has paid any outstanding balance, marking the end of the import process as defined in this paper. The released shipment can then be picked up by the importing firm either immediately or after some time if the firm decides to take advantage of port storage facilities or if it faces liquidity constraints to pay port fees.

We rely on the World Bank Enterprise Surveys (WBES) database for the period 2006-2016 to construct our measure of uncertainty in import clearance times, which covers unpredictable delays arising at any stage of the import process as discussed above, from vessel berthing to Customs clearance.<sup>15</sup> The WBES database provides quantitative and qualitative information on the characteristics of firms operating in the manufacturing and services sectors in developing countries; as well as the business environment they face (e.g. access to finance, regulations, taxes and trade costs). Surveys are administered to nationally representative samples of formal firms with at least five workers. We use the standardized version of the database which compiles only those surveys following the WBES Global methodology, yielding information that is comparable across countries and years. We restrict our analysis to manufacturing firms identified through ISIC codes 15 to 36.<sup>16</sup> Since in most low-income countries, only a very limited number of firms operate in some manufacturing sectors defined at the 2-digit ISIC level, we aggregate the 22 ISIC manufacturing divisions into five sectors of interest (Table A1 in the Appendix): (i) manufacture of food, beverage and tobacco products (ISIC codes 15-16); (ii) manufacture of textile and leather-related products (ISIC codes 17-19); (iii) manufacture of wood-related products (ISIC codes 20-22); (iv) manufacture of minerals, metals and chemicals (ISIC codes 23-28); and (v) manufacture of advanced products (ISIC codes 29-36).<sup>17</sup> We end up with a sample of 16,475 firms whose selected characteristics are displayed in Table 1.<sup>18</sup> We find that 30 percent of manufacturing firms are direct exporters and among these, 74 percent import the inputs that enter their production process. In contrast, only one-third of firms that exclusively sell in the domestic market are also direct importers, comforting us in our approach. In

> 14For example, in the orange or red channel the inspector assesses the appropriate value and taxes and duties to be paid.

> 15The WBES database was accessed in August 2017.

> 16The survey question allowing to identify input-importing firms applies to manufacturing firms only, naturally dictating our sample choice. The Enterprise Surveys classify firms based on the International Standard Industrial Classification of All Economic Activities (ISIC), Revision 3.1.

> 17Recycling (code 37) is excluded from the analysis due to poor data coverage in the World Bank Enterprise Surveys and unavailability in the Exporter Dynamics Database (see Section 2.2).

> 18This figure was arrived at by restricting the sample to those firms that reported positive direct exports as a share of total sales and that also provided an indication on whether they import material inputs or supplies. Only manufacturing firms located in the 48 developing countries retained in the econometric analysis are considered (see Section 2.2 and Table A1 in the Appendix).

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