TY - JOUR
T1 - Trade, FDI, and productivity convergence
T2 - A dynamic panel data approach in 25 countries
AU - Lee, Jaehwa
PY - 2009/8
Y1 - 2009/8
N2 - The investigation, described in the paper, included developing and implementing a dynamic panel framework to study and compare the role of trade and foreign direct investment (FDI) in long-run productivity convergence. Specifically, it employed the technique of a recently developed panel unit-root approach to examine and compare time-series behaviors of manufacturing productivity and services productivity of 25 countries from 1975 to 2004. Results indicated that long-run productivity convergence in manufacturing was trade-related as well as FDI-related. The results have also shown that grouping countries according to their trade partners tends to produce more significant evidence for productivity convergence than their FDI partners do. Furthermore, especially services sector shows no or little convergence, while the manufacturing sector shows strong evidence in favor of convergence. The findings suggest that trade and FDI matter for convergence particularly in the manufacturing productivity movement across countries but more specifically that trade proves more important in explaining long-run manufacturing productivity convergence.
AB - The investigation, described in the paper, included developing and implementing a dynamic panel framework to study and compare the role of trade and foreign direct investment (FDI) in long-run productivity convergence. Specifically, it employed the technique of a recently developed panel unit-root approach to examine and compare time-series behaviors of manufacturing productivity and services productivity of 25 countries from 1975 to 2004. Results indicated that long-run productivity convergence in manufacturing was trade-related as well as FDI-related. The results have also shown that grouping countries according to their trade partners tends to produce more significant evidence for productivity convergence than their FDI partners do. Furthermore, especially services sector shows no or little convergence, while the manufacturing sector shows strong evidence in favor of convergence. The findings suggest that trade and FDI matter for convergence particularly in the manufacturing productivity movement across countries but more specifically that trade proves more important in explaining long-run manufacturing productivity convergence.
KW - FDI
KW - Panel unit-root test
KW - Productivity convergence
KW - Trade
UR - http://www.scopus.com/inward/record.url?scp=67349218918&partnerID=8YFLogxK
U2 - 10.1016/j.japwor.2008.08.003
DO - 10.1016/j.japwor.2008.08.003
M3 - Article
AN - SCOPUS:67349218918
SN - 0922-1425
VL - 21
SP - 226
EP - 238
JO - Japan and the World Economy
JF - Japan and the World Economy
IS - 3
ER -