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IMF Staff Papers Logo    November 2000
Volume 47, Number 1
 
International Trade and Productivity Growth: Exploring the Sectoral Effects for Developing Countries
By Ehsan U. Choudhri and Dalia S. Hakura

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Abstract: The paper estimates an empirical relation based on Krugman's "technological gap" model to explore the influence of the pattern of international trade and production on the overall productivity growth of a developing country. A key result is that increased import competition in medium-growth (but not in low- or high-growth) manufacturing sectors enhances overall productivity growth. The authors also find that a production-share weighted average of (technological leaders') sectoral productivity growth rates has a significant effect on the rate of aggregate productivity growth. [JEL F10, F43, O10, O40]

2000 International Monetary Fund