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The nature of trade and growth linkages (English)

This paper shows new empirical regularities indicating that the structure of trade connections affects the trade-growth nexus. System generalized method of moments estimations indicate that key structural features associated with the composition of traded products and partners matter for growth. The results show that increases in the degree of intra-industry trade, greater insertion into the middle of global value chains, and increases in the shares of differentiated goods, skilled labor-intensive goods, and high-tech-intensive goods in traded baskets are all associated with higher income growth. An increase in the share of trade with countries at the core of the global trade network is also associated with greater growth effects. However, many of these effects are non-linear and depend on the degree of trade openness and labor force education. The results suggest that technological diffusion and learning spillovers play some role in the growth effects associated with the nature of trade connections.


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    Didier Brandao,Tatiana, Pinat,Magali

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    Policy Research Working Paper

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    The World Region,

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    The nature of trade and growth linkages

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    global value chain;share of trade;global trade network;access to new technology;share of world trade;negative impact on growth;per capita growth rate;explanatory variable;trading partner;terms of trade;human capital;economies of scale;effect of trade;homogeneous good;Technology Diffusion;types of good;trade and growth;method of moments;human capital investment;fragmentation of production;classification of goods;trade relation;parameter of interest;governance and institutions;investment in knowledge;factor of production;improvement in technology;dispersion of production;innovation and growth;volume of trade;exchange rate volatility;aggregate demand effect;foreign direct investment;global production chain;fluctuations in trade;tertiary school enrollment;list of countries;diversification of export;exchange rate fluctuation;iron ore mining;share of export;production line;types of knowledge;estimation of equation;human capital development;conditional convergence effects;high-level human capital;homogenous good;traded goods;estimation result;production process;skilled labor;standard error;empirical evidence;central country;export basket;relative price;trade relationship;trade product;income growth;Public Infrastructure;intensive products;estimation procedure;reference price;productivity gain;import good;product differentiation;empirical analysis;0 hypothesis;goods trade;primary product;industry code;advanced economy;foreign technology;fixed effect;covariance matrix;knowledge spillover;random walk;moment condition;global market;trade partner;benchmark specification;International Trade;positive growth;individual products;raw material;research productivity;supply chain;positive impact;cross-country variation;trade imbalance;increased volatility;colonial times;average process;open access;endogeneity issue;cross-border trade;central places;comparative advantage;tertiary schooling;open economy;small economy;negative growth;domestic growth;sample mean;relative income;difference equation;intense competition;increased competition;benchmark case;active labor;export good;horizontal differentiation;optical glass;empirical literature;downward bias;lagged dependent;home market;geographic variable;technological revolution;trade share;inventory management;wage differential;trade links;trade costs;knowledge frontier;Research Support;unbalanced panel;price effect;statistical significance;differentiated products;empirical regularity;managerial practice;market condition;national industry;world market;efficiency gain;mineral commodity;literature review;monopolistic competition;alternative specification;alternative classifications;basic specification;global network;estimation technique;causal effect;linear function;Emerging economies;emerging economy;e-mail address;trade structure;exporting firms;high wage;geographic characteristic;domestic consumer;relative ranking;estimation bias;geographical controls;differential impact;trade theory;direct proxy;variance-covariance matrix;initial value;development policy;descriptive statistic;future value;classification code;lagged value;telephone line;model specification;small sample;



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Didier Brandao,Tatiana Pinat,Magali

The nature of trade and growth linkages (English). Policy Research working paper,no. WPS 8161 Washington, D.C. : World Bank Group.