Working Paper: NBER ID: w19657
Authors: William R. Kerr
Abstract: 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.
Keywords: Ricardian trade; technology diffusion; export growth; immigrant communities
JEL Codes: F11; F14; F15; F22; J44; J61; L14; O31; O33; O57
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| ricardian technology differences (F11) | changes in trade patterns (F12) |
| lack of substantial adjustments in extensive margin of trade (F14) | observed effects along existing trade routes (F69) |
| heterogeneous technology diffusion from immigrant communities (J61) | export growth (F43) |
| productivity growth (O49) | export growth (F43) |