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Skill Intensity in Foreign Trade and Economic Growth

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  • Julia Woerz

    (Faculty of Economics, Erasmus Universiteit Rotterdam, and Vienna Institute for International Economic Studies)

Abstract

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

Suggested Citation

  • Julia Woerz, 2004. "Skill Intensity in Foreign Trade and Economic Growth," Tinbergen Institute Discussion Papers 04-059/2, Tinbergen Institute.
    • Handle: RePEc:tin:wpaper:20040059
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    File URL: https://papers.tinbergen.nl/04059.pdf
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    References listed on IDEAS

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    Cited by:

    1. Angela Cheptea & Lionel Fontagné & Soledad Zignago, 2014. "European export performance," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 150(1), pages 25-58, February.
    2. Cosmos Antwi-Boateng, 2015. "Does Export Trading Influence Economic Growth In Ghana?," Journal of Empirical Economics, Research Academy of Social Sciences, vol. 4(1), pages 63-77.
    3. Gaulier, Guillaume & Santoni, Gianluca & Taglioni, Daria & Zignago, Soledad, 2013. "In the wake of the global crisis : evidence from a new quarterly database of export competitiveness," Policy Research Working Paper Series 6733, The World Bank.

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    More about this item

    Keywords

    trade structure; Balassa specialization index; economic growth; spillovers;
    All these keywords.

    JEL classification:

    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • O19 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models
    • O57 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - Comparative Studies of Countries

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