Trade and productivity. An industry perspective.

Badinger, Harald and Breuss, Fritz (2005) Trade and productivity. An industry perspective. EI Working Papers / Europainstitut, 66. Europainstitut, WU Vienna University of Economics and Business, Vienna.


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We use a sample of 14 OECD countries and 15 manufacturing industries to test for the effect of trade on productivity. Endogeneity concerns are accounted for using the geographical component of trade as instrument as suggested by Frankel and Romer (1999). Our results are in line with previous studies: Trade increases productivity. What is puzzling, however, is the size of the effect: An increase in the export ratio by one percentage point increases productivity in manufacturing by 0.6 percent on average. This is less than half of the effect obtained in previous studies. We discuss likely explanations for this discrepancy.

Item Type: Paper
Keywords: trade / productivity / manufacturing
Classification Codes: JEL F14, F43, L60
Divisions: Forschungsinstitute > Europafragen
Depositing User: Repository Administrator
Date Deposited: 23 Mar 2005 14:17
Last Modified: 22 Oct 2019 00:41


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