TY - JOUR AU - Broda,Christian AU - Greenfield,Joshua AU - Weinstein,David TI - From Groundnuts to Globalization: A Structural Estimate of Trade and Growth JF - National Bureau of Economic Research Working Paper Series VL - No. 12512 PY - 2006 Y2 - September 2006 UR - http://www.nber.org/papers/w12512 L1 - http://www.nber.org/papers/w12512.pdf N1 - Author contact info: Christian Broda Duquesne Capital Management 40W 57th Floor 24th Floor 24th New York, NY 10019 Tel: 917-214-0301 E-Mail: broda@duquesne.com Joshua Greenfield Columbia University E-Mail: jeg173@columbia.edu David Weinstein Columbia University, Department of Economics 420 W. 118th Street MC 3308 New York, NY 10027 Tel: 212/854-6880 Fax: 212/854-8059 E-Mail: dew35@columbia.edu M3 - presented at "International Trade and Investment Meeting", March 31, 2006 AB - 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. ER -