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Productivity convergence in international trade: The role of industrial-based policies

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  • Nazlioglu, Saban
  • Huseyni, İbrahim
  • Tunc, Ahmet
  • Payne, James E.

Abstract

The Prebisch-Singer hypothesis implies divergence in the terms of trade between developing and developed countries but does not eliminate the possibility of convergence if productivity in developing countries’ exports sufficiently improves. This study constructs a new and unique export sophistication dataset for the productivity of high-technology export products to examine convergence behavior of developed and emerging market countries. Relative and weak σ-convergence tests reveal overall productivity divergence in international trade. However, there are convergence clubs whereby income, R&D expenditures, foreign direct investment, and educational expenditures yield similar effects on the convergence club formation in both developed and emerging market countries.

Suggested Citation

  • Nazlioglu, Saban & Huseyni, İbrahim & Tunc, Ahmet & Payne, James E., 2024. "Productivity convergence in international trade: The role of industrial-based policies," Journal of Policy Modeling, Elsevier, vol. 46(1), pages 1-19.
    • Handle: RePEc:eee:jpolmo:v:46:y:2024:i:1:p:1-19
    DOI: 10.1016/j.jpolmod.2023.12.002
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    Cited by:

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    2. James E. Payne & James W. Saunoris & Saban Nazlioglu & Russell S. Sobel, 2025. "Correction to: What factors drive cross‑country economic freedom convergence?," Public Choice, Springer, vol. 204(3), pages 561-561, September.

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    JEL classification:

    • B17 - Schools of Economic Thought and Methodology - - History of Economic Thought through 1925 - - - International Trade and Finance
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • Q47 - Agricultural and Natural Resource Economics; Environmental and Ecological Economics - - Energy - - - Energy Forecasting

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