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International Trade and Productivity Growth: Exploring the Sectoral Effects for Developing Countries

Author

Listed:
  • Ms. Dalia S Hakura
  • Ehsan U. Choudhri

Abstract

The paper estimates an empirical relation based on Krugman’s ‘technological gap’ model to explore the influence of the pattern of international trade and production on the overall productivity growth of a developing country. A key result is that increased import competition in medium-growth (but not in low- or high-growth) manufacturing sectors enhances overall productivity growth. The authors also find that a production-share weighted average of (technological leaders’) sectoral productivity growth rates has a significant effect on the rate of aggregate productivity growth.

Suggested Citation

  • Ms. Dalia S Hakura & Ehsan U. Choudhri, 2000. "International Trade and Productivity Growth: Exploring the Sectoral Effects for Developing Countries," IMF Working Papers 2000/017, International Monetary Fund.
  • Handle: RePEc:imf:imfwpa:2000/017
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    Cited by:

    1. Elsa Kyander, 2020. "Trade Liberalisation and Female Employment in Manufacturing: Evidence from India," CSAE Working Paper Series 2020-22, Centre for the Study of African Economies, University of Oxford.
    2. Julio Vicente Cateia, 2019. "Guinea-Bissau Trade: A Panel Data Analysis," Asian Development Policy Review, Asian Economic and Social Society, vol. 7(4), pages 277-296, December.
    3. Jörg Mayer & Arunas Butkevicius & Ali Kadri & Juan Pizarro, 2004. "Dynamic products in world exports," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 140(3), pages 762-795, September.
    4. Hermassi Hela & Aloui Amel, 2016. "An Empirical Evaluation of the Sectoral Impact of International Trade on the Restructuring of the Production System: A Case Study of Tunisia," International Journal of Management Sciences, Research Academy of Social Sciences, vol. 7(6), pages 312-331.
    5. María Soledad Feal Zubimendi, 2008. "Crecimiento económico y apertura comercial: análisis de la influencia de los canales," Estudios Economicos, Universidad Nacional del Sur, Departamento de Economia, vol. 25(50), pages 37-73, January-j.
    6. R. Rijesh, 2015. "Technology Import and Manufacturing Productivity in India: Firm Level Analysis," Journal of Industry, Competition and Trade, Springer, vol. 15(4), pages 411-434, December.
    7. Xiaolan Fu, 2004. "Exports, Technical Progress and Productivity Growth in Chinese Manufacturing Industries," Working Papers wp278, Centre for Business Research, University of Cambridge.
    8. Nursini Nursini, 2017. "Effect of Fiscal Policy and Trade Openness on Economic Growth in Indonesia: 1990-2015," International Journal of Economics and Financial Issues, Econjournals, vol. 7(1), pages 358-364.
    9. Ang, James B., 2009. "CO2 emissions, research and technology transfer in China," Ecological Economics, Elsevier, vol. 68(10), pages 2658-2665, August.
    10. Asongu, Simplice & Acha-Anyi, Paul, 2020. "Enhancing ICT for Productivity in Sub-Saharan Africa: Thresholds for Complementary Policies," MPRA Paper 103140, University Library of Munich, Germany.
    11. Vidya Mahambare & V. N. Balasubramanyam, 2005. "Trade Liberalisation and India’s Manufacturing Sector," Development and Comp Systems 0505010, University Library of Munich, Germany.
    12. Jalil, Abdul, 2014. "Energy–growth conundrum in energy exporting and importing countries: Evidence from heterogeneous panel methods robust to cross-sectional dependence," Energy Economics, Elsevier, vol. 44(C), pages 314-324.
    13. Ms. Katrin Elborgh-Woytek, 2003. "Of Openess and Distance: Trade Developments in the Commonwealth of Independent States, 1993-2002," IMF Working Papers 2003/207, International Monetary Fund.
    14. Harrison, Ann E. & Rodriguez-Clare, Andres, 2009. "Trade, Foreign Investment, and Industrial Policy," MPRA Paper 15561, University Library of Munich, Germany.
    15. Hussien, Abdurohman & Ahmed, Shakeel & Yousaf, Muhammed, 2012. "Does Trade Policy Explain Total Factor Productivity Differences Across Countries?," MPRA Paper 86594, University Library of Munich, Germany.
    16. Managi, Shunsuke & Kumar, Surender, 2009. "Trade-induced technological change: Analyzing economic and environmental outcomes," Economic Modelling, Elsevier, vol. 26(3), pages 721-732, May.
    17. Julia Wörz, 2005. "Skill Intensity in Foreign Trade and Economic Growth," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 32(1), pages 117-144, March.
    18. Mr. Hans P Lankes & Mr. Azim M Sadikov & Mr. Jean-Jacques Hallaert & Mr. Dustin Smith & Ms. Katrin Elborgh-Woytek, 2006. "Fiscal Implications of Multilateral Tariff Cuts," IMF Working Papers 2006/203, International Monetary Fund.
    19. Mr. Allan D. Brunner, 2003. "The Long-Run Effects of Tradeon Income and Income Growth," IMF Working Papers 2003/037, International Monetary Fund.
    20. Harrison, Ann & Rodríguez-Clare, Andrés, 2010. "Trade, Foreign Investment, and Industrial Policy for Developing Countries," Handbook of Development Economics, in: Dani Rodrik & Mark Rosenzweig (ed.), Handbook of Development Economics, edition 1, volume 5, chapter 0, pages 4039-4214, Elsevier.

    More about this item

    Keywords

    WP; Productivity Growth; Trade Liberalization; Technological Gap; TFP growth rate; trade variable; trade effect; trade ratio; technology lag; s TFP growth; gap in a sector; growth performance; trade index; productivity gap; Productivity; Total factor productivity; Imports; Technology transfer; East Asia; Middle East; North Africa; Sub-Saharan Africa; South Asia;
    All these keywords.

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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