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Skill Intensity in Foreign Trade and Economic Growth

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  • Wörz, Julia

Abstract

This paper explores the link between trade structure, trade specialization and per capita income growth. It is argued that industrial upgrading in export specialization patterns has a positive long-run growth effect, while the effect of structural change in industrial import patterns is in principle ambiguous. A standard empirical growth model is augmented by various measures of structural change. The hypothesis that not trade per se matters, but that various types of trading activities impact differently on economic growth is tested on a sample of 45 countries (OECD members and selected Asian and Latin American countries) over the period 1981-1997. The data set comprises exports and imports for 35 manufacturing industries at the 3-digit level of the ISIC classification which are grouped according to skill intensity. The results of the dynamic panel estimation point towards a positive long-run growth effect arising from trade specialization in medium-high-skillintensive industries. Further, important distinctions between the skill intensity of export and import patterns and their respective influence on economic development, as well as between the group of developing countries and OECD members are observed in this relationship.

Suggested Citation

  • Wörz, Julia, 2004. "Skill Intensity in Foreign Trade and Economic Growth," Conference papers 331252, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    • Handle: RePEc:ags:pugtwp:331252
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    References listed on IDEAS

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    1. Anderson, Kym & Nielsen, Chantal, 2004. "Economic Effects of Agricultural Biotechnology Research in the Presence of Price-Distorting Policies," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 19, pages 374-394.
    2. Chantal Nielsen & Kym Anderson, 2001. "Global market effects of alternative European responses to genetically modified organisms," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 137(2), pages 320-346, June.
    3. Hertel, Thomas, 1997. "Global Trade Analysis: Modeling and applications," GTAP Books, Center for Global Trade Analysis, Department of Agricultural Economics, Purdue University, number 7685, December.
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