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Trade Policy and Productivity Growth in OECD Manufacturing

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  • Benjamin Nancy
  • Michael Ferrantino

Abstract

Trade liberalization may promote economic growth in a number of ways, including by accelerating the rate of technological change. Firms that face more intense import competition may be spurred to greater rates of innovation; firms which export may absorb new technologies through their contact with international markets. This paper examines evidence on trade policy and productivity growth for a sample of thirteen OECD countries and including eighteen manufacturing sectors, using data primarily from the 1980s. Within individual sectors, there are strong productivity convergence effects within the OECD. After controlling for convergence, we find a positive association between high rates of productivity growth and low tariffs, and between high productivity growth and strong export performance. We found no particular association between high productivity growth and import penetration. The results are consistent with the possibility of positive linkages between trade liberalization and accelerated productivity growth. [F1, O4]

Suggested Citation

  • Benjamin Nancy & Michael Ferrantino, 2001. "Trade Policy and Productivity Growth in OECD Manufacturing," International Economic Journal, Taylor & Francis Journals, vol. 15(4), pages 95-115.
    • Handle: RePEc:taf:intecj:v:15:y:2001:i:4:p:95-115
    DOI: 10.1080/10168730100000055
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    2. German Hector Gonzalez & Fernando Andres Delbianco, 2011. "Apertura y productividad total de los factores: análisis de la contemporaneidad en los quiebres estructurales para América Latina y el Caribe," Revista de Analisis Economico – Economic Analysis Review, Universidad Alberto Hurtado/School of Economics and Business, vol. 26(1), pages 53-81, Junio.
    3. Carlos Esteban Posada P., 2004. "Causas del desarrollo y mecánica del crecimiento," Method and Hist of Econ Thought 0411003, University Library of Munich, Germany.
    4. Jianmin Tang & Carolyn MacLeod, 2006. "Labour force ageing and productivity performance in Canada," Canadian Journal of Economics/Revue canadienne d'économique, John Wiley & Sons, vol. 39(2), pages 582-603, May.

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