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International trade and inclusive growth: a primer

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  • Daniel Lederman

Abstract

Purpose - This article aims to provide two analytical frameworks for understanding the role of trade in promoting inclusive growth in developing economies. Design/methodology/approach - A working definition of inclusive growth focuses on long‐term, sustained growth associated with productivity growth and employment opportunities for broad portions of households and firms within countries. International integration can promote inclusive growth when workers and firms are able to adjust to enter into growing economic activities and adopt technologies availed through international trade. The frameworks described in this note build on simple household and firm choice models, which require only basic knowledge of development economics. Findings - The discussion highlights how these frameworks can help analysts focus on research and policy questions related to the impacts of international trade across the distribution of households and firms within countries. It also discusses publicly available data sets that can be used to explore some aspects of inclusive growth. In addition, the note highlights important caveats that need to be acknowledged by analysts and discusses avenues for future research, which needs to be part and parcel of the inclusive growth agenda. Originality/value - This is a first attempt to apply an analytical definition of inclusive growth, which emphasizes second order or behavioral responses of workers and firms' profits, to understand the link between international integration and development.

Suggested Citation

  • Daniel Lederman, 2013. "International trade and inclusive growth: a primer," Indian Growth and Development Review, Emerald Group Publishing Limited, vol. 6(1), pages 88-112, April.
    • Handle: RePEc:eme:igdrpp:v:6:y:2013:i:1:p:88-112
    DOI: 10.1108/17538251311329568
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    Citations

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    Cited by:

    1. Daniel Lederman & Guido Porto, 2016. "The Price Is Not Always Right: On the Impacts of Commodity Prices on Households (and Countries)," The World Bank Research Observer, World Bank, vol. 31(1), pages 168-197.
    2. Pierluigi Montalbano & Silvia Nenci & Carlo Pietrobelli, 2014. "International Linkages, Value Added Trade and LAC Firms' Productivity," Departmental Working Papers of Economics - University 'Roma Tre' 0198, Department of Economics - University Roma Tre.
    3. Moonsung Kang & Innwon Park & Dong-Eun Rhee, 2017. "Korea's growth-driven trade policies: Inclusive or exclusive?," The World Economy, Wiley Blackwell, vol. 40(11), pages 2475-2490, November.

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