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International trade and the sectoral composition of production


  • E. Cristina Echevarria

    (University of Saskatchewan)


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/

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    References listed on IDEAS

    1. Romer, Paul M, 1986. "Increasing Returns and Long-run Growth," Journal of Political Economy, University of Chicago Press, vol. 94(5), pages 1002-1037, October.
    2. Kuznets, Simon, 1973. "Modern Economic Growth: Findings and Reflections," American Economic Review, American Economic Association, vol. 63(3), pages 247-258, June.
    3. Jeremy Greenwood & Gokce Uysal, 2005. "New Goods and the Transition to a New Economy," Journal of Economic Growth, Springer, vol. 10(2), pages 99-134, June.
    4. Piyabha Kongsamut & Sergio Rebelo & Danyang Xie, 2001. "Beyond Balanced Growth," Review of Economic Studies, Oxford University Press, vol. 68(4), pages 869-882.
    5. John Laitner, 2000. "Structural Change and Economic Growth," Review of Economic Studies, Oxford University Press, vol. 67(3), pages 545-561.
    6. Echevarria, Cristina, 1997. "Changes in Sectoral Composition Associated with Economic Growth," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 38(2), pages 431-452, May.
    7. Cristina Echevarria, 2001. "Non-homothetic preferences and growth," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 9(2), pages 151-171.
    8. Cristina Echevarria, 1998. "A Three-Factor Agricultural Production Function: The Case of Canada," International Economic Journal, Taylor & Francis Journals, vol. 12(3), pages 63-75.
    9. Cristina Echevarria, 1995. "Agricultural Development vs. Industrialization: Effects of Trade," Canadian Journal of Economics, Canadian Economics Association, vol. 28(3), pages 631-647, August.
    10. Edwards, Sebastian, 1992. "Trade orientation, distortions and growth in developing countries," Journal of Development Economics, Elsevier, vol. 39(1), pages 31-57, July.
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    Cited by:

    1. Satoshi Honma & Yushi Yoshida, 2012. "An Empirical Investigation of the Balance of Embodied Emission in Trade:Industry Structure and Emission Abatement," Discussion Papers 57, Kyushu Sangyo University, Faculty of Economics.
    2. Managi, Shunsuke & Hibiki, Akira & Tsurumi, Tetsuya, 2009. "Does trade openness improve environmental quality?," Journal of Environmental Economics and Management, Elsevier, vol. 58(3), pages 346-363, November.
    3. Yuping Deng & Helian Xu, 2015. "International Direct Investment and Transboundary Pollution: An Empirical Analysis of Complex Networks," Sustainability, MDPI, Open Access Journal, vol. 7(4), pages 1-25, April.
    4. Timothy J. Kehoe & Felipe Meza, 2011. "Catch-up growth followed by stagnation: Mexico, 1950–2010," Working Papers 693, Federal Reserve Bank of Minneapolis.
    5. 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.
    6. 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.
    7. Timothy Kehoe & Felipe Meza, 2011. "Catch-up Growth Followed by Stagnation: Mexico 1950–2008," Latin American Journal of Economics-formerly Cuadernos de Economía, Instituto de Economía. Pontificia Universidad Católica de Chile., vol. 48(2), pages 227-268.
    8. 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.
    9. repec:eee:deveco:v:130:y:2018:i:c:p:45-65 is not listed on IDEAS
    10. 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.
    11. 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.
    12. Honma, Satoshi & Yoshida, Yushi, 2014. "An Account of Pollution Emission Embodied in Global Trade: PGT1 and PGT2 Database," MPRA Paper 57489, University Library of Munich, Germany.

    More about this item


    Sectoral composition; International trade; Economic growth;

    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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