IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this paper or follow this series

Trade, Import Competition and Productivity Growth In the Food Industry

  • Olper, Alessandro
  • Pacca, Lucia
  • Curzi, Daniele

Melitz and Ottaviano’s (2008) firm heterogeneity model predicts that trade liberalization induces a selection process from low to high productivity firms, that translates into an industry productivity growth. A similar firms’ selection effect is induced by market size. These predictions are tested across 25 European countries and 9 food industries, over the 1995–2008 period. Using different dynamic panel estimators we find a strong support for the model predictions, namely that import penetration is systematically positively related to productivity growth. The results are robust to measurement issues in productivity after controlling for market size, country and sector heterogeneities, and for the endogeneity of import competition. Interestingly, this positive relationship is almost exclusively driven by competition in final products coming from developed (especially EU-15) countries, suggesting that EU food imports constitute closer substitutes for domestic production than non-EU imports. These results have some potentially interesting policy implications.

If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

File URL: http://purl.umn.edu/152383
Download Restriction: no

Paper provided by International Agricultural Trade Research Consortium in its series Proceedings Issues, 2013: Productivity and Its Impacts on Global Trade, June 2-4, 2013. Seville, Spain with number 152383.

as
in new window

Length:
Date of creation: Jun 2013
Date of revision:
Handle: RePEc:ags:iatr13:152383
Contact details of provider: Web page: http://iatrcweb.org/

More information through EDIRC

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

as in new window
  1. Colantone, Italo & Crinò, Rosario, 2014. "New imported inputs, new domestic products," Journal of International Economics, Elsevier, vol. 92(1), pages 147-165.
  2. Aghion, Philippe & Blundell, Richard William & Griffith, Rachel & Howitt, Peter & Prantl, Susanne, 2005. "The Effects of Entry on Incumbent Innovation and Productivity," CEPR Discussion Papers 5323, C.E.P.R. Discussion Papers.
  3. Bronwyn H. Hall & Clint Cumminq & Elizabeth S. Laderman & Joy Mundy, 1988. "The R&D Master File Documentation," NBER Technical Working Papers 0072, National Bureau of Economic Research, Inc.
  4. Daniel Trefler, 2006. "The Long and Short of the Canada-U.S. Free Trade Agreement," STICERD - Economics of Industry Papers 41, Suntory and Toyota International Centres for Economics and Related Disciplines, LSE.
  5. Pinelopi K. Goldberg & Amit Khandelwal & Nina Pavcnik & Petia Topalova, 2008. "Imported Intermediate Inputs and Domestic Product Growth: Evidence from India," NBER Working Papers 14416, National Bureau of Economic Research, Inc.
  6. Arellano, Manuel & Bond, Stephen, 1991. "Some Tests of Specification for Panel Data: Monte Carlo Evidence and an Application to Employment Equations," Review of Economic Studies, Wiley Blackwell, vol. 58(2), pages 277-97, April.
  7. Caselli, Francesco & Esquivel, Gerardo & Lefort, Fernando, 1996. " Reopening the Convergence Debate: A New Look at Cross-Country Growth Empirics," Journal of Economic Growth, Springer, vol. 1(3), pages 363-89, September.
  8. Grossman, Gene & Helpman, Elhanan, 1993. "Protection for Sale," CEPR Discussion Papers 827, C.E.P.R. Discussion Papers.
  9. Dani Rodrik, 2013. "Unconditional Convergence in Manufacturing," The Quarterly Journal of Economics, Oxford University Press, vol. 128(1), pages 165-204.
  10. Carlos Arnade & Utpal Vasavada, 1995. "Causality Between Productivity And Exports In Agriculture: Evidence From Asia And Latin America," Journal of Agricultural Economics, Wiley Blackwell, vol. 46(2), pages 174-186.
  11. Maria Bas, 2009. "Trade, Foreign Inputs and Firms’ Decisions: Theory and Evidence," Working Papers 2009-35, CEPII research center.
  12. Alessandro Olper & Valentina Raimondi, 2007. "Patterns and Determinants of International Trade Costs in the Food Industry," LICOS Discussion Papers 18807, LICOS - Centre for Institutions and Economic Performance, KU Leuven.
  13. Robert C. Feenstra & Gordon H. Hanson, 1999. "The Impact Of Outsourcing And High-Technology Capital On Wages: Estimates For The United States, 1979-1990," The Quarterly Journal of Economics, MIT Press, vol. 114(3), pages 907-940, August.
  14. Grossman, G.M. & Helpman, E., 1989. "Quality Ladders And Product Cycles," Papers 152, Princeton, Woodrow Wilson School - Public and International Affairs.
  15. Dixit, Avinash K & Stiglitz, Joseph E, 1977. "Monopolistic Competition and Optimum Product Diversity," American Economic Review, American Economic Association, vol. 67(3), pages 297-308, June.
  16. Grossman, Gene M, 1982. "Import Competition from Developed and Developing Countries," The Review of Economics and Statistics, MIT Press, vol. 64(2), pages 271-81, May.
  17. Marc J. Melitz & Stephen J. Redding, 2014. "Missing Gains from Trade?," NBER Working Papers 19810, National Bureau of Economic Research, Inc.
  18. Stephen Bond & Anke Hoeffler, 2001. "GMM Estimation of Empirical Growth Models," Economics Series Working Papers 2001-W21, University of Oxford, Department of Economics.
  19. Olper, Alessandro & Raimondi, Valentina, 2006. "Explaining National Border Effects in the Quad Food Trade," 2006 Annual Meeting, August 12-18, 2006, Queensland, Australia 25467, International Association of Agricultural Economists.
  20. Krugman, Paul, 1980. "Scale Economies, Product Differentiation, and the Pattern of Trade," American Economic Review, American Economic Association, vol. 70(5), pages 950-59, December.
  21. Miller, Stephen M. & Upadhyay, Mukti P., 2002. "Total factor productivity and the convergence hypothesis," Journal of Macroeconomics, Elsevier, vol. 24(2), pages 267-286, June.
  22. James Harrigan, 1998. "Estimation of cross-country differences in industry production functions," Staff Reports 36, Federal Reserve Bank of New York.
  23. Mark J. Melitz, 2002. "The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity," NBER Working Papers 8881, National Bureau of Economic Research, Inc.
  24. Pinelopi Koujianou Goldberg & Nina Pavcnik, 2007. "Distributional Effects of Globalization in Developing Countries," Journal of Economic Literature, American Economic Association, vol. 45(1), pages 39-82, March.
  25. Pavcnik, Nina, 2002. "Trade Liberalization, Exit, and Productivity Improvement: Evidence from Chilean Plants," Review of Economic Studies, Wiley Blackwell, vol. 69(1), pages 245-76, January.
  26. Mary O'Mahony & Marcel P. Timmer, 2009. "Output, Input and Productivity Measures at the Industry Level: The EU KLEMS Database," Economic Journal, Royal Economic Society, vol. 119(538), pages F374-F403, 06.
  27. George Philippidis & Helena Resano-Ezcaray & Ana I. Sanjuán-López, 2013. "Capturing zero-trade values in gravity equations of trade: an analysis of protectionism in agro-food sectors," Agricultural Economics, International Association of Agricultural Economists, vol. 44(2), pages 141-159, 03.
  28. Natalie Chen & Jean Imbs & Andrew Scott, 2006. "The dynamics of trade and competition," Working Paper Research 91, National Bank of Belgium.
  29. Richard Blundell & Steve Bond, 1999. "GMM estimation with persistent panel data: an application to production functions," IFS Working Papers W99/04, Institute for Fiscal Studies.
  30. Robert J. Barro, 2012. "Convergence and Modernization Revisited," NBER Working Papers 18295, National Bureau of Economic Research, Inc.
  31. Marc J. Melitz & Gianmarco I.P. Ottaviano, 2005. "Market Size, Trade, and Productivity," Development Working Papers 201, Centro Studi Luca d\'Agliano, University of Milano.
  32. David Roodman, 2006. "How to Do xtabond2: An Introduction to "Difference" and "System" GMM in Stata," Working Papers 103, Center for Global Development.
  33. Bond, Stephen Roy & Hoeffler, Anke & Temple, Jonathan, 2001. "GMM Estimation of Empirical Growth Models," CEPR Discussion Papers 3048, C.E.P.R. Discussion Papers.
  34. Jun Ruan & Munisamy Gopinath, 2008. "Global productivity distribution and trade liberalisation: evidence from processed food industries," European Review of Agricultural Economics, Foundation for the European Review of Agricultural Economics, vol. 35(4), pages 439-460, December.
  35. Marc J. Melitz & Daniel Trefler, 2012. "Gains from Trade When Firms Matter," Journal of Economic Perspectives, American Economic Association, vol. 26(2), pages 91-118, Spring.
  36. Sarra Ben Yahmed & Sean Dougherty, 2012. "Import Competition, Domestic Regulation and Firm-Level Productivity Growth in the OECD," OECD Economics Department Working Papers 980, OECD Publishing.
  37. Altomonte Carlo & Barattieri Alessandro & Rungi Armando, 2014. "Import Penetration, Intermediate Inputs and Productivity: Evidence from Italian Firms," Rivista italiana degli economisti, Società editrice il Mulino, issue 1, pages 45-66.
  38. Trefler, Daniel, 1993. "Trade Liberalization and the Theory of Endogenous Protection: An Econometric Study of U.S. Import Policy," Journal of Political Economy, University of Chicago Press, vol. 101(1), pages 138-60, February.
  39. Valentina Raimondi & Alessandro Olper, 2011. "Trade Elasticity, Gravity and Trade Liberalisation: Evidence from the Food Industry," Journal of Agricultural Economics, Wiley Blackwell, vol. 62(3), pages 525-550, 09.
  40. Curzi, Daniele & Olper, Alessandro, 2012. "Export behavior of Italian food firms: Does product quality matter?," Food Policy, Elsevier, vol. 37(5), pages 493-503.
  41. Krugman, Paul R, 1981. "Intraindustry Specialization and the Gains from Trade," Journal of Political Economy, University of Chicago Press, vol. 89(5), pages 959-73, October.
  42. Marc J. Melitz & Gianmarco I. P. Ottaviano, 2008. "Market Size, Trade, and Productivity (DOI:10.111/j.1467-937x.2007.00463.x)," Review of Economic Studies, Oxford University Press, vol. 75(3), pages 985-985.
  43. Antonella Nocco, 2012. "Selection, Market Size and International Integration: Do Vertical Linkages Play a Role?," Review of International Economics, Wiley Blackwell, vol. 20(5), pages 960-973, November.
Full references (including those not matched with items on IDEAS)

This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

When requesting a correction, please mention this item's handle: RePEc:ags:iatr13:152383. See general information about how to correct material in RePEc.

For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (AgEcon Search)

If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

If references are entirely missing, you can add them using this form.

If the full references list an item that is present in RePEc, but the system did not link to it, you can help with this form.

If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your profile, as there may be some citations waiting for confirmation.

Please note that corrections may take a couple of weeks to filter through the various RePEc services.

This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.