Journal Article

Heterogeneous Technology Diffusion and Ricardian Trade Patterns

William R Kerr

in The World Bank Economic Review

Volume 32, issue 1, pages 163-182
Published in print February 2018 | ISSN: 0258-6770
Published online April 2017 | e-ISSN: 1564-698X | DOI: https://dx.doi.org/10.1093/wber/lhx002
Heterogeneous Technology Diffusion and Ricardian Trade Patterns

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  • International Trade
  • International Factor Movements and International Business
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Abstract

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.

Keywords: Trade; Exports; Comparative Advantage; Technological Transfer; Patents; Innovation; Research and Development; Immigration; Networks

Journal Article.  10608 words. 

Subjects: International Trade ; International Factor Movements and International Business ; Particular Labour Markets ; Mobility, Unemployment, and Vacancies ; Market Structure, Firm Strategy, and Market Performance ; Technological Change; Research and Development ; Economywide Country Studies

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