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What You Exported Matters: Persistence in Productive Capabilities across Two Eras of Globalization

Author

Listed:
  • Isabella M Weber

    (Department of Economics and Political Economy Research Institute, University of Massachusetts Amherst)

  • Gregor Semieniuk

    (Political Economy Research Institute and Department of Economics, University of Massachusetts Amherst)

  • Tom Westland

    (Department of History, University of Cambridge)

  • Junshang Liang

    (Department of Economics, University of Massachusetts Amherst)

Abstract

Does what you exported matter? We build a new global commodity-level export database for the previous era of globalization and find persistence in productive capabilities proxied by economic complexity, export diversification, and sophistication across a century. We also show that productive capabilities at the turn of the 20th century are a powerful predictor of today’s income levels. We demonstrate that our results are not driven by persistence in geography or institutions. The persistence mechanism is the complementarity between past and future productive capabilities with one important qualification, the persistent negative effect of European overseas colonization. We also study shocks that undermined persistence, confirm the resource curse hypothesis for the long run and find a positive but slow effect of democratization.

Suggested Citation

  • Isabella M Weber & Gregor Semieniuk & Tom Westland & Junshang Liang, 2021. "What You Exported Matters: Persistence in Productive Capabilities across Two Eras of Globalization," UMASS Amherst Economics Working Papers 2021-02, University of Massachusetts Amherst, Department of Economics.
    • Handle: RePEc:ums:papers:2021-02
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    File URL: https://scholarworks.umass.edu/econ_workingpaper/299/
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    More about this item

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F63 - International Economics - - Economic Impacts of Globalization - - - Economic Development
    • N10 - Economic History - - Macroeconomics and Monetary Economics; Industrial Structure; Growth; Fluctuations - - - General, International, or Comparative
    • O10 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - General
    • O50 - Economic Development, Innovation, Technological Change, and Growth - - Economywide Country Studies - - - General

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