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International trade and the sectoral composition of production

Author

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  • E. Cristina Echevarria

    (University of Saskatchewan)

Abstract

The main purpose of this study is to explore the interrelations between global economic growth and the changing composition of global trade. I define a global unbalanced growth path as a situation in which there exists a global constant return to capital. I use this definition to explore two claims regarding the sectoral composition of trade between primaries and non-primaries. First, in the long run, the comparative advantage in one good or the other is driven by the TFP differential in both sectors, which explains the fact that less developed countries tend to export primaries even though primaries are not less capital intensive. Second, non-homothetic preferences imply that, as the global economy develops, fewer and fewer countries export only or mostly primaries. (Copyright: Elsevier)

Suggested Citation

  • E. Cristina Echevarria, 2008. "International trade and the sectoral composition of production," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 11(1), pages 192-206, January.
    • Handle: RePEc:red:issued:06-126
    DOI: 10.1016/j.red.2007.06.004
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    References listed on IDEAS

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    2. Pedro Cavalcanti Ferreira & Alberto Trejos, 2011. "Gains from Trade and Measured Total Factor Productivity," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 14(3), pages 496-510, July.
    3. Yuping Deng & Helian Xu, 2015. "International Direct Investment and Transboundary Pollution: An Empirical Analysis of Complex Networks," Sustainability, MDPI, vol. 7(4), pages 1-25, April.
    4. Unjung Whang, 2017. "Structural Transformation and Comparative Advantage: Implications for Small Open Economies," The World Economy, Wiley Blackwell, vol. 40(4), pages 743-763, April.
    5. Todd Sanderson & Fredoun Z. Ahmadi‐Esfahani, 2009. "Testing Comparative Advantage in Australian Broadacre Agriculture Under Climate Change: Theoretical and Empirical Models," Economic Papers, The Economic Society of Australia, vol. 28(4), pages 346-354, December.
    6. Fereira, Semertesides Bitica & Cateia, Júlio Vicente, 2023. "Trade reform, infrastructure investment, and structural transformation in Africa: Evidence from Guinea-Bissau," Emerging Markets Review, Elsevier, vol. 55(C).
    7. Sung-Gook Choi & Deok-Sun Lee, 2019. "Engel's law in the commodity composition of exports," Papers 1911.01568, arXiv.org.
    8. Managi, Shunsuke, 2012. "Trade, economic growth and environment," IDE Discussion Papers 342, Institute of Developing Economies, Japan External Trade Organization(JETRO).
    9. Tetsuya Tsurumi & Shunsuke Managi, 2010. "Decomposition of the environmental Kuznets curve: scale, technique, and composition effects," Environmental Economics and Policy Studies, Springer;Society for Environmental Economics and Policy Studies - SEEPS, vol. 11(1), pages 19-36, February.
    10. Timothy J. Kehoe & Felipe Meza, 2011. "Catch-up growth followed by stagnation: Mexico, 1950–2010," Working Papers 693, Federal Reserve Bank of Minneapolis.
    11. Dessy, Sylvain & Mbiekop, Flaubert & Pallage, Stéphane, 2010. "On the mechanics of trade-induced structural transformation," Journal of Macroeconomics, Elsevier, vol. 32(1), pages 251-264, March.
    12. Honma, Satoshi & Yoshida, Yushi, 2020. "An empirical investigation of the balance of embodied emission in trade: Industry structure and emission abatement," Economic Modelling, Elsevier, vol. 92(C), pages 277-294.
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    16. Girik Allo, Albertus & Sukartini, Ni Made & Widodo, Tri, 2017. "Dynamic Changes in Comparative Advantage of Indonesian Agricultural Products," MPRA Paper 80028, University Library of Munich, Germany.

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    More about this item

    Keywords

    Sectoral composition; International trade; Economic growth;
    All these keywords.

    JEL classification:

    • 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
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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