Industrial Diversity, Trade Patterns, and Productivity Convergence

17 Pages Posted: 27 Apr 2009

See all articles by Robert Stehrer

Robert Stehrer

Vienna Institute of International Economic Studies (WIIW)

Julia Woerz

Vienna Institute of International Economic Studies (WIIW); Tinbergen Institute Rotterdam (TIR)

Abstract

Recent developments in economic integration show rather diverse patterns of integration in the world economy. Some countries remain predominantly in the low-tech industries whereas other countries succeed in becoming competitive in high-tech industries as well. The authors postulate that a country positioning itself at the lower end of the spectrum of high-tech industries is more favorable to its long-term development than aiming at the upper end of low-tech industries. They argue that countries which specialize in the lower end of the medium- high-tech activities are rewarded by faster productivity increases also in the upper end of the high-tech industries. In contrast, early specialization in medium- low-tech branches yields positive spillovers, mainly in the low-tech sector, which is not conducive to increasing activity in high-tech industries. The authors sketch a theoretical outline of this idea and present econometric results, including four aggregate manufacturing branches across 37 countries.

Suggested Citation

Stehrer, Robert and Woerz, Julia, Industrial Diversity, Trade Patterns, and Productivity Convergence. Review of Development Economics, Vol. 13, No. 2, pp. 356-372, May 2009. Available at SSRN: https://ssrn.com/abstract=1395430 or http://dx.doi.org/10.1111/j.1467-9361.2008.00506.x

Robert Stehrer

Vienna Institute of International Economic Studies (WIIW) ( email )

A-1010 Vienna
Austria

Julia Woerz

Vienna Institute of International Economic Studies (WIIW) ( email )

A-1010 Vienna
Austria
+43 1 5336610 24 (Phone)
+43 1 5336610 50 (Fax)

HOME PAGE: http://www.wiiw.ac.at/e/staff_woerz.html

Tinbergen Institute Rotterdam (TIR)

P.O. Box 1738
3000 DR Rotterdam
Netherlands

HOME PAGE: http://www.tinbergen.nl/home.html

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