NATIONAL BUREAU OF ECONOMIC RESEARCH
NATIONAL BUREAU OF ECONOMIC RESEARCH

From Groundnuts to Globalization: A Structural Estimate of Trade and Growth

Christian Broda, Joshua Greenfield, David Weinstein

NBER Working Paper No. 12512
Issued in September 2006
NBER Program(s):   ITI

Starting with Romer [1987] and Rivera-Batiz-Romer [1991] economists have been able to model how trade enhances growth through the creation and import of new varieties. In this framework, international trade increases economic output through two channels. First, trade raises productivity levels because producers gain access to new imported varieties. Second, increases in the number of varieties drives down the cost of innovation and results in ever more variety creation. Using highly disaggregate trade data, e.g. Gabon's imports of Gambian groundnuts, we structurally estimate the impact that new imports have had in approximately 4000 markets per country. We then move from groundnuts to globalization by building an exact TFP index that aggregates these micro gains to obtain an estimate of trade on productivity growth for each country. We find that in the typical country in the world, new imported varieties account for 15 percent of its productivity growth. These effects are larger in developing countries where the median impact of new imported varieties equals a quarter of national productivity growth.

download in pdf format
   (299 K)

email paper

This paper is available as PDF (299 K) or via email.

Machine-readable bibliographic record - MARC, RIS, BibTeX

Document Object Identifier (DOI): 10.3386/w12512

Users who downloaded this paper also downloaded these:
Broda and Weinstein w10314 Globalization and the Gains from Variety
Broda, Limao, and Weinstein w12033 Optimal Tariffs: The Evidence
Albouy w14130 The Colonial Origins of Comparative Development: An Investigation of the Settler Mortality Data
Broda and Weinstein w14017 Understanding International Price Differences Using Barcode Data
Feenstra and Weinstein w15749 Globalization, Markups and U.S. Welfare
 
Publications
Activities
Meetings
NBER Videos
Data
People
About

Support
National Bureau of Economic Research, 1050 Massachusetts Ave., Cambridge, MA 02138; 617-868-3900; email: info@nber.org

Contact Us