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

Author: Ehsan U. Choudhri and Ms. Dalia S Hakura

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.

Volume/Issue: Volume 2000 Issue 017

Publication date: January 2000

ISBN: 9781451843521

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Topics covered in this book

This title contains information about the following subjects. Click on a subject if you would like to see other titles with the same subjects.

Business and Economics , Exports and Imports , 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

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Summary

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.