Seminarios académicos y conferencias
Accounting for Productivity Gains from Trade
17 Marzo 2016 - 17 hrs.
Sala 209, Facultad de Ciencias Económicas y Administrativas UC
Abstract: I develop a model to account for productivity gains from international trade. The model features an endogenous technology adoption decision and exogenous productiv- ity growth. Lower trade barriers drive firms to adopt better technologies, increasing aggregate productivity. Alternatively, exogenous productivity changes affect aggregate productivity. The model exploits the fact that these changes impact trade volumes differently to identify changes in aggregate productivity coming from trade barriers. I use the model to account for the gains from trade in South Africa. Trade volumes fell from 1974 to 1994, and increased thereafter. Similarly, manufacturing productiv- ity first dropped, and then increased. I find that trade can account for two thirds of the initial decline in productivity, and for half the increase after 1994. This reduction and later increase in productivity coincides with the imposition and later removal of apartheid trade sanctions, suggesting these had large effects on productivity. My find- ings contrast studies that find small roles for trade openness in South Africa. This is because they only measure the effects of tariff drops, which I also find to be small.