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Testing the Linkages between Trade and Productivity Growth

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Author Info
Claire Economidou
Antu Panini Murshid

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Abstract

The authors examine the effect of trade on productivity growth using data from nine manufacturing industries across 12 OECD countries over the period 1978-97. Because causality between productivity growth and trade share runs both ways, geographical characteristics of countries are used to instrument for average bilateral trade volumes over the 20-year period. In addition, to exploit the time-series nature of the data, the authors construct a panel dataset and employ dynamic panel data techniques. After controlling for industry-specific heterogeneity, the results indicate that increased exposure to trade, in particular higher import volumes, exerts a positive influence on industries' productivity growth. However, the effect is rather small. Copyright © 2008 The Authors. Journal compilation © 2008 Blackwell Publishing Ltd.

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File URL: http://www.blackwell-synergy.com/doi/abs/10.1111/j.1467-9361.2008.00457.x
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Publisher Info
Article provided by Blackwell Publishing in its journal Review of Development Economics.

Volume (Year): 12 (2008)
Issue (Month): 4 (November)
Pages: 845-860
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Handle: RePEc:bla:rdevec:v:12:y:2008:i:4:p:845-860

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  1. Yin-Wong Cheung & Antonio Garcia Pascual, 2004. "Market Structure, Technology Spillovers, and Persistence in Productivity Differentials," The International Journal of Applied Economics, Department of General Business, Southeastern Louisiana University, vol. 1(1), pages 1-23, September. [Downloadable!]
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This page was last updated on 2009-10-26.

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