Testing the Linkages between Trade and Productivity Growth
AbstractWe examine the effect of trade on productivity growth using data from nine manufacturing industries across twelve OECD countries over the period 1978-1997. Since 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, we construct a panel data set and employ dynamic panel data techniques. After controlling for industry-specific heterogeneity, our 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.
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Bibliographic InfoPaper provided by Utrecht School of Economics in its series Working Papers with number 07-22.
Length: 31 pages
Date of creation: Mar 2007
Date of revision:
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Other versions of this item:
- Claire Economidou & Antu Panini Murshid, 2008. "Testing the Linkages between Trade and Productivity Growth," Review of Development Economics, Wiley Blackwell, vol. 12(4), pages 845-860, November.
- F14 - International Economics - - Trade - - - Empirical Studies of Trade
- F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
- O47 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence
This paper has been announced in the following NEP Reports:
- NEP-ALL-2007-10-06 (All new papers)
- NEP-CSE-2007-10-06 (Economics of Strategic Management)
- NEP-EFF-2007-10-06 (Efficiency & Productivity)
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
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- Muhammad, Shahbaz, 2012.
"Does Trade Openness Affect Long Run Growth? Cointegration, Causality and Forecast Error Variance Decomposition Tests for Pakistan,"
37391, University Library of Munich, Germany, revised 10 Mar 2012.
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Emerging Markets Finance and Trade,
M.E. Sharpe, Inc., vol. 47(1), pages 5-27, January.
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