Trade and Productivity

  title={Trade and Productivity},
  author={Francisco Alcal{\'a} and Antonio Ciccone},
We find that international trade has an economically significant and statistically robust positive effect on productivity. Our trade measure is imports plus exports relative to purchasing power parity GDP (real openness), which we argue is preferable on theoretical grounds to the nominal measure conventionally used. We also find a significantly positive aggregate scale effect. Our estimates control for proxies of institutional quality as well as geography and take into account the endogeneity… CONTINUE READING
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