Productivity convergence in international trade: The role of industrial-based policies

Saban Nazlioglu, İbrahim Huseyni, Ahmet Tunc and James Payne

Journal of Policy Modeling, 2024, vol. 46, issue 1, 1-19

Abstract: The Prebisch-Singer hypothesis implies divergence in the terms of trade between developing and developed countries but does not eliminate the possibility of convergence if productivity in developing countries’ exports sufficiently improves. This study constructs a new and unique export sophistication dataset for the productivity of high-technology export products to examine convergence behavior of developed and emerging market countries. Relative and weak σ-convergence tests reveal overall productivity divergence in international trade. However, there are convergence clubs whereby income, R&D expenditures, foreign direct investment, and educational expenditures yield similar effects on the convergence club formation in both developed and emerging market countries.

Keywords: International trade; Productivity; Export sophistication; High technology; Convergence; Panel data; Common factor (search for similar items in EconPapers)
JEL-codes: B17 C23 F13 F43 O14 Q47 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jpolmo:v:46:y:2024:i:1:p:1-19

DOI: 10.1016/j.jpolmod.2023.12.002

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