Working Paper | HBS Working Paper Series | 2013

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 empirical analysis has three comparative advantages: including emerging and advanced economies, isolating panel variation regarding the link between productivity and exports, and exploiting heterogeneous technology diffusion from immigrant communities in the United States for identification. The latter instruments are developed by combining panel variation on the development of new technologies across U.S. cities with historical settlement patterns for migrants from countries. The instrumented elasticity of export growth on the intensive margin with respect to the exporter's productivity growth is between 1.6 and 2.4 depending upon weighting.

Keywords: trade; Exports; Comparative Advantage; Technological Transfer; patents; innovation; Research and Development; immigration; networks; Networks; Patents; Residency Characteristics; Technology Adoption; Trade; Research and Development; Immigration; United States;

Citation:

Kerr, William R. "Heterogeneous Technology Diffusion and Ricardian Trade Patterns." Harvard Business School Working Paper, No. 14-039, November 2013. (NBER Working Paper Series, No. 19657, November 2013.)