Ricardian productivity differences and the gains from trade

Levchenko, Andrei A.; Zhang, Jing

doi:10.1016/j.euroecorev.2013.10.006

Cited by 36 publications

(5 citation statements)

References 43 publications

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“…On average, the GFT rise from 8.8% to 11.6%, which represents an increase in GFT of roughly 33%. This result is consistent with previous findings in the literature (French, 2016;Levchenko & Zhang, 2014) and indicates that specialisation across sectors is an important source of GFT for many countries.…”

Section: Gft With One Sector Many Sectors and Intermediate Inputssupporting

confidence: 93%

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Vertical specialisation and gains from trade

Alexander

2020

World Economy

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This refers to the sequential manner in which most goods and services are produced, where a given product uses intermediate products as inputs, which are themselves produced with other intermediate inputs, and so forth. 1 The nature of this production structure has important implications for productivity and the gains from international trade. As has long been acknowledged by trade economists (e.g. Krugman & Venables, 1995), trade in intermediate inputs provides a magnification effect that raises welfare significantly more than trade in final goods alone. This effect is typically captured by assuming a 'roundabout' production structure, which delivers a sizable welfare impact (see Costinot & Rodríguez-Clare, 2014). 2 Although the roundabout assumption is convenient in a number of ways, it abstracts from an additional channel whereby multi-stage production might facilitate gains from trade (GFT), namely through specialisation across production stages or 'vertical specialisation' (VS). Consider, for example, smartphone production. Some popular models are assembled as final products in China, using intermediate inputs like the LCD screen, gyroscope and flash memory sourced from countries like Japan, Switzerland and Korea. In this example and others, the final stage of production (e.g. assembly) is technologically distinct from upstream production stages (e.g. gyroscope production). Vertical specialisation also features prominently in maquiladora trade for Latin American countries and export-processing zones for China and other Asian countries.1 Multi-stage production is also commonly referred to as sequential production.2 Roundabout production assumes that any given good can be used either for final consumption or as an input into production.

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Section: Gft With One Sector Many Sectors and Intermediate Inputssupporting

confidence: 93%

“…ALEXANDER that these gains are significant (Caliendo & Parro, 2015;French, 2016;Levchenko & Zhang, 2014;Ossa, 2015). I find that, according to my model, across-sector specialisation is more important than across-stage specialisation in determining the GFT based on the data.…”

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confidence: 67%

Vertical specialisation and gains from trade

Alexander

2020

World Economy

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“…These panel exercises are closest in spirit to the industrial specialization work of Harrigan (1997b) and the structural Ricardian model of . Other tests of the Ricardian model are MacDougall (1951MacDougall ( , 1952, Stern (1962), Golub and Hsieh (2000), Morrow (2010), Chor (2010), Shikher (2010), Fieler (2011), , Caliendo and Parro (2012), Bombardini et al (2012), and Levchenko and Zhang (2012). The comparative advantages of this work are in its substantial attention to non-OECD economies, the stricter panel assessment using heterogeneous technology di¤usion, and the instruments built o¤ of di¤erential access to the US frontier.…”

Section: Introductionmentioning

confidence: 99%

Heterogeneous Technology Diffusion and Ricardian Trade Patterns

Kerr¹

2013

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This study tests the importance of Ricardian technology differences for international trade. The empirical analysis has three comparative advantages: including emerging and advanced economies, isolating panel variation regarding the link between productivity and exports, and exploiting heterogeneous technology diffusion from immigrant communities in the United States for identification. The latter instruments are developed by combining panel variation on the development of new technologies across U.S. cities with historical settlement patterns for migrants from countries. The instrumented elasticity of export growth on the intensive margin with respect to the exporter's productivity growth is between 1.6 and 2.4 depending upon weighting.

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“…First, to control for the presence of resource rich countries, we use data from the World Bank to construct variables equal to 1 if average rents from oil, coal, and mineral exceed 10 percent of GDP for the 2000-2018 period. Second, we follow Levchenko and Zhang (2014) and construct variables for capital stock per worker based on data from the Penn World Tables 9.1. In addition, we also include exporters' and importers' GDP per capita from the WDI to account for countries' level of development, which can affect the composition and quality of imports and exports.…”

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confidence: 99%

Gravity Model–Based Export Potential: An Application to Turkey

Mulabdić¹,

Yasar²

2021

Policy Research Working Papers

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The Policy Research Working Paper Series disseminates the findings of work in progress to encourage the exchange of ideas about development issues. An objective of the series is to get the findings out quickly, even if the presentations are less than fully polished. The papers carry the names of the authors and should be cited accordingly. The findings, interpretations, and conclusions expressed in this paper are entirely those of the authors. They do not necessarily represent the views of the International Bank for Reconstruction and Development/World Bank and its affiliated organizations, or those of the Executive Directors of the World Bank or the governments they represent.

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Ricardian productivity differences and the gains from trade

Cited by 36 publications

References 43 publications

Vertical specialisation and gains from trade

Vertical specialisation and gains from trade

Heterogeneous Technology Diffusion and Ricardian Trade Patterns

Gravity Model–Based Export Potential: An Application to Turkey

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