Trade and productivity

Francisco Alcalá and Antonio Ciccone

Economics Working Papers from Department of Economics and Business, Universitat Pompeu Fabra

Abstract: We estimate the effect of international trade on average labor productivity at the country level. Our empirical approach relies on summary measures of trade that, we argue, are preferable on both theoretical and empirical grounds to the one conventionally used. In contrast to the marginally significant and non-robust effects of trade on productivity found previously, our estimates are highly significant and robust even when we include institutional quality and geographic factors in the empirical analysis. We also examine the channels through which trade and institutional quality affect average labor productivity. Our finding is that trade works through labor efficiency, while institutional quality works through physical and human capital accumulation. We conclude with an exploratory analysis of the role of trade policies for average labor productivity.

Keywords: Trade; productivity; institutions trade policy (search for similar items in EconPapers)
JEL-codes: F43 O40 (search for similar items in EconPapers)
Date: 2001-10, Revised 2002-07
New Economics Papers: this item is included in nep-dev, nep-eff, nep-ent and nep-net
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (55)

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Related works:
Journal Article: Trade and Productivity (2004)
Working Paper: Trade and Productivity (2003)
Working Paper: Trade and Productivity (2001)
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Persistent link: https://EconPapers.repec.org/RePEc:upf:upfgen:580

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