Perspectives on Trade and Structural Transformation

George Alessandria, Robert Johnson and Kei-Mu Yi

No 28720, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: This paper surveys macroeconomic and microeconomic perspectives on the role of international trade in structural transformation. We start by describing canonical frameworks that have been used to quantify how trade influences sectoral shares of employment and value added. We then pivot to survey micro-empirical evidence on the impact of changes in trade on the allocation of labor across sectors and productivity at the firm level. In this, we put special emphasis on the role of participation in global value chains and inward foreign direct investment in mediating these effects. Next, we evaluate evidence on the barriers to trade faced by low-income countries, with special attention to recent work that measures these costs taking firm dynamics into account. We conclude by discussing how these micro-perspectives can be integrated into macro-models to advance our understanding of structural change.

JEL-codes: F1 F43 O11 O4 (search for similar items in EconPapers)
Date: 2021-04
New Economics Papers: this item is included in nep-int, nep-lab, nep-opm and nep-tid
Note: DEV EFG ITI
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Citations: View citations in EconPapers (6)

Published as George Alessandria & Robert C. Johnson & Kei-Mu Yi, 2023. "Perspectives on trade and structural transformation," Oxford Development Studies, vol 51(4), pages 455-475.

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