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Industrial Diversity, Trade Patterns, and Productivity Convergence

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  • Robert Stehrer
  • Julia Woerz

Abstract

Recent developments in economic integration show rather diverse patterns of integration in the world economy. Some countries remain predominantly in the low‐tech industries whereas other countries succeed in becoming competitive in high‐tech industries as well. The authors postulate that a country positioning itself at the lower end of the spectrum of high‐tech industries is more favorable to its long‐term development than aiming at the upper end of low‐tech industries. They argue that countries which specialize in the lower end of the medium–high‐tech activities are rewarded by faster productivity increases also in the upper end of the high‐tech industries. In contrast, early specialization in medium–low‐tech branches yields positive spillovers, mainly in the low‐tech sector, which is not conducive to increasing activity in high‐tech industries. The authors sketch a theoretical outline of this idea and present econometric results, including four aggregate manufacturing branches across 37 countries.

Suggested Citation

  • Robert Stehrer & Julia Woerz, 2009. "Industrial Diversity, Trade Patterns, and Productivity Convergence," Review of Development Economics, Wiley Blackwell, vol. 13(2), pages 356-372, May.
    • Handle: RePEc:bla:rdevec:v:13:y:2009:i:2:p:356-372
    DOI: 10.1111/j.1467-9361.2008.00506.x
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    Citations

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    Cited by:

    1. Julia Wörz, 2005. "Skill Intensity in Foreign Trade and Economic Growth," Empirica, Springer;Austrian Institute for Economic Research;Austrian Economic Association, vol. 32(1), pages 117-144, March.
    2. Roland-Holst, David, 2004. "CGE Methods for Poverty Incidence Analysis: An Application to Vietnam’s WTO Accession," Conference papers 331305, Purdue University, Center for Global Trade Analysis, Global Trade Analysis Project.
    3. Alessia Amighini, 2005. "China in the international fragmentation of production: Evidence from the ICT industry," European Journal of Comparative Economics, Cattaneo University (LIUC), vol. 2(2), pages 203-219, December.
    4. Alessandrini, Michele & Fattouh, Bassam & Ferrarini, Benno & Scaramozzino, Pasquale, 2011. "Tariff liberalization and trade specialization: Lessons from India," Journal of Comparative Economics, Elsevier, vol. 39(4), pages 499-513.
    5. Foster-McGregor, Neil & Kaulich, Florian & Stehrer, Robert, 2015. "Global Value Chains in Africa," MERIT Working Papers 2015-024, United Nations University - Maastricht Economic and Social Research Institute on Innovation and Technology (MERIT).
    6. Wonsub Eum & Jeong‐Dong Lee, 2022. "Alternative paths of diversification for developing countries," Review of Development Economics, Wiley Blackwell, vol. 26(4), pages 2336-2355, November.
    7. Ángel Paúl Moreno Plascencia & Rafael Salvador Espinosa Ramírez, 2018. "Effects of the Foreign Direct Investment on the Productivity of Latin American Countries (1990-2012)," Economía: teoría y práctica, Universidad Autónoma Metropolitana, México, vol. 49(2), pages 7-36, Julio-Dic.

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    More about this item

    JEL classification:

    • C22 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Time-Series Models; Dynamic Quantile Regressions; Dynamic Treatment Effect Models; Diffusion Processes
    • C23 - Mathematical and Quantitative Methods - - Single Equation Models; Single Variables - - - Models with Panel Data; Spatio-temporal Models
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • L6 - Industrial Organization - - Industry Studies: Manufacturing
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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