Trade and Sectoral Productivity

Type Journal Article - The Economic Journal
Title Trade and Sectoral Productivity
Volume 121
Issue 555
Publication (Day/Month/Year) 2011
Page numbers 958-989
Even though di?erences in sectoral total factor productivity are at the heart of Ricardian
trade theory and many models of growth and development, very little is known about their size
and their form. In this paper we try to ?ll this gap by using a Hybrid-Ricardo-Heckscher-Ohlin
trade model and bilateral sectoral trade data to overcome the data problem that has limited
previous studies, which have used input and output data to back out productivities, to a small
number of OECD economies. We provide a comparable set of sectoral productivities for 24 man
ufacturing sectors and more than sixty countries at all stages of development. Our results show
that TFP di?erences in manufacturing sectors between rich and poor countries are substantial
and far more pronounced in skill and R&D intensive sectors. We also apply our productivity
estimates to test theories on development that have implications for the patterns of sectoral
productivities across countries.

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