Heterogeneous Technology Diffusion and Ricardian Trade Patterns

Kerr, William R.

doi:10.1093/wber/lhx002

Publication: Heterogeneous Technology Diffusion and Ricardian Trade Patterns

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Date

2018-02-01

ISSN

1564-698X

Published

2018-02-01

Author(s)

Kerr, William R.

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.

Citation

“Kerr, William R.. 2018. Heterogeneous Technology Diffusion and Ricardian Trade Patterns. World Bank Economic Review. © Published by Oxford University Press on behalf of the World Bank. http://hdl.handle.net/10986/32170 License: CC BY-NC-ND 3.0 IGO.”