 Trade, FDI, and productivity convergence: A dynamic panel data approach in 25 countriesJaehwa Lee Japan and the World Economy, 2009, vol. 21, issue 3, 226-238 Abstract: The investigation, described in the paper, included developing and implementing a dynamic panel framework to study and compare the role of trade and foreign direct investment (FDI) in long-run productivity convergence. Specifically, it employed the technique of a recently developed panel unit-root approach to examine and compare time-series behaviors of manufacturing productivity and services productivity of 25 countries from 1975 to 2004. Results indicated that long-run productivity convergence in manufacturing was trade-related as well as FDI-related. The results have also shown that grouping countries according to their trade partners tends to produce more significant evidence for productivity convergence than their FDI partners do. Furthermore, especially services sector shows no or little convergence, while the manufacturing sector shows strong evidence in favor of convergence. The findings suggest that trade and FDI matter for convergence particularly in the manufacturing productivity movement across countries but more specifically that trade proves more important in explaining long-run manufacturing productivity convergence. Keywords: Trade; FDI; Productivity; convergence; Panel; unit-root; test (search for similar items in EconPapers) Downloads: (external link) Related works: Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text Persistent link: https://EconPapers.repec.org/RePEc:eee:japwor:v:21:y:2009:i:3:p:226-238 Access Statistics for this article Japan and the World Economy is currently edited by Robert Dekle and Yasushi Hamao More articles in Japan and the World Economy from Elsevier |
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