Other Unpublished Work | 2009

Heterogeneous Technology Diffusion and Ricardian Trade Patterns

by William R. Kerr

Abstract

This study tests the importance of Ricardian technology differences for international trade. The developed panel includes both emerging and advanced economies, and particular attention is devoted to the variation exploited in empirical tests. The elasticity of export growth on the intensive margin to the exporter's output development is 0.3 in preferred specifications. The elasticity for trade entry is 0.02. To provide greater empirical traction, specifications exploit uneven technology diffusion from the US through ethnic scientific networks to model Ricardian advantages. The intensive margin elasticity of exports to stronger US scientific integration is 0.15; the extensive margin elasticity is 0.01.

Keywords: Trade; Immigration; Competitive Advantage; Integration; Technology; United States;