From Groundnuts to Globalization: A Structural Estimate of Trade and Growth / Christian Broda, Joshua Greenfield, David Weinstein.

Format:

Book

Author/Creator:

Broda, Christian.

Contributor:

National Bureau of Economic Research.

Greenfield, Joshua.

Weinstein, David.

Series:

Working Paper Series (National Bureau of Economic Research) no. w12512.

NBER working paper series no. w12512

Language:

English

Physical Description:

1 online resource: illustrations (black and white);

Other Title:

From Groundnuts to Globalization

Place of Publication:

Cambridge, Mass. National Bureau of Economic Research 2006.

Summary:

Starting with Romer [1987] and Rivera-Batiz-Romer [1991] economists have been able to model how trade enhances growth through the creation and import of new varieties. In this framework, international trade increases economic output through two channels. First, trade raises productivity levels because producers gain access to new imported varieties. Second, increases in the number of varieties drives down the cost of innovation and results in ever more variety creation. Using highly disaggregate trade data, e.g. Gabon's imports of Gambian groundnuts, we structurally estimate the impact that new imports have had in approximately 4000 markets per country. We then move from groundnuts to globalization by building an exact TFP index that aggregates these micro gains to obtain an estimate of trade on productivity growth for each country. We find that in the typical country in the world, new imported varieties account for 15 percent of its productivity growth. These effects are larger in developing countries where the median impact of new imported varieties equals a quarter of national productivity growth.

Notes:

Print version record

September 2006.