Heterogeneous Technology Diffusion and Ricardian Trade Patterns

65 Pages Posted: 11 Apr 2017

See all articles by William Kerr

William Kerr

Harvard University - Entrepreneurial Management Unit

Date Written: April 10, 2017

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: International Trade and Trade Rules

Suggested Citation

Kerr, William R., Heterogeneous Technology Diffusion and Ricardian Trade Patterns (April 10, 2017). World Bank Policy Research Working Paper No. 8027. Available at SSRN: https://ssrn.com/abstract=2950897

William R. Kerr (Contact Author)

Harvard University - Entrepreneurial Management Unit ( email )

Soldiers Field Road
Morgan 270C
Boston, MA 02163
United States

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