Heterogeneous Technology Diffusion and Ricardian Trade Patterns
Migration and trade are often linked through ethnic networks boosting bilateral trade. This study uses migration to quantify the importance of Ricardian technology differences for international trade. The framework provides the first panel estimate...
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| Format: | Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2017
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| Online Access: | http://documents.worldbank.org/curated/en/780211491839158726/Heterogeneous-technology-diffusion-and-Ricardian-trade-patterns http://hdl.handle.net/10986/26372 |
| Summary: | Migration and trade are often linked
through ethnic networks boosting bilateral trade. This study
uses migration to quantify the importance of Ricardian
technology differences for international trade. The
framework provides the first panel estimates connecting
country-industry productivity and exports, and the study
exploits 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 US
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. This provides an important contribution to the
trade literature of Ricardian advantages, and it establishes
a connection of migration to home country exports beyond
bilateral networks. |
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