International Productivity Differences, Infrastructure, and Comparative Advantage

20 Pages Posted: 2 May 2007

See all articles by Stephen R. Yeaple

Stephen R. Yeaple

Pennsylvania State University - College of the Liberal Arts - Department of Economic; National Bureau of Economic Research (NBER)

Stephen S. Golub

Swarthmore College - Economics Department

Abstract

This paper provides an empirical analysis of the effect of infrastructure provision on industry-level productivity and international specialization, as suggested by Clarida and Findlays (1992) model. We calculate total factor productivity (TFP) for 18 developed and developing countries and 10 manufacturing industries, and study the effects of supplies of roads, telecommunications and electric power on international variations in sectoral TFP, i.e. comparative advantage. We also examine the effects of infrastructure on the sectoral composition of output across countries. Using a three-stage least-squares estimation strategy to control for endogeneity of infrastructure provision, we find that infrastructure, especially roads, helps to explain patterns of comparative advantage and international specialization.

Suggested Citation

Yeaple, Stephen R. and Golub, Stephen S., International Productivity Differences, Infrastructure, and Comparative Advantage. Review of International Economics, Vol. 15, No. 2, pp. 223-242, May 2007. Available at SSRN: https://ssrn.com/abstract=983239 or http://dx.doi.org/10.1111/j.1467-9396.2007.00667.x

Stephen R. Yeaple (Contact Author)

Pennsylvania State University - College of the Liberal Arts - Department of Economic ( email )

524 Kern Graduate Building
University Park, PA 16802-3306
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National Bureau of Economic Research (NBER)

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Stephen S. Golub

Swarthmore College - Economics Department ( email )

Swarthmore, PA 19081
United States
610-328-8103 (Phone)
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