Abstract
International trade is believed to promote growth for countries at the technological frontier by expanding the market over which to exploit new ideas. For countries behind the technological frontier, three views of the relationship between growth and international trade are described and assessed empirically: trade hampers growth for natural resource-abundant countries that specialize in the export of technologically stagnant primary products; trade acts as the ‘handmaiden’ of growth by improving the quality of investment and slowing the tendency of its return to fall; and trade acts as the engine of growth by providing a conduit for technology transfer.
This is a preview of subscription content, log in via an institution to check access.
Access this chapter
Tax calculation will be finalised at checkout
Purchases are for personal use only
Bibliography
Caves, R. 1965. ‘Vent for surplus’ models of trade and growth. In Trade, growth, and the balance of payments, ed. R. Baldwin et al. Chicago: Rand McNally.
Coe, D., E. Helpman, and A. Hoffmaister. 1997. North–South R&D spillovers. Economic Journal 107 (440): 134–149.
Crowly, A., J. Rauch, S. Seagrave, and D. Smith. 1998. Quantitative cross-national studies of economic development: A comparison of the economics and sociology literatures. Studies in Comparative International Development 33: 30–57.
Deardorff, A. 1984. An exposition and exploration of Krueger’s trade model. Canadian Journal of Economics 17: 731–746.
Dolan, C., C. Harris-Pascal, and J. Humphrey 1999. Horticulture commodity chains: The impact on the UK market of the African fresh vegetable industry. Working Paper No. 96. Brighton: Institute of Development Studies.
Easterly, W. 2001. The lost decades: Developing countries’ stagnation in spite of policy reform 1980–1998. Journal of Economic Growth 6: 135–157.
Egan, M.-L., and A. Mody. 1992. Buyer-seller links in export development. World Development 20: 321–334.
Engerman, S., and K. Sokoloff. 2002. Factor endowments, inequality, and paths of development among new world economies. Economia 3: 41–88.
Gereffi, G. 1994. The organization of buyer-driven global commodity chains: How U.S. retailers shape overseas production networks. In Commodity chains and global capitalism, ed. G. Gereffi and M. Korzeniewicz. Westport: Praeger.
Gereffi, G. 1999. International trade and industrial upgrading in the apparel commodity chain. Journal of International Economics 48: 37–70.
Grossman, G., and E. Helpman. 1991. Innovation and growth in the global economy. Cambridge, MA: MIT Press.
Javorcik, B. 2004. Does foreign direct investment increase the productivity of domestic firms? In search of spillovers through backward linkages. American Economic Review 94: 605–627.
Jung, W., and P. Marshall. 1985. Exports, growth, and causality in developing countries. Journal of Development Economics 18: 1–12.
Katayama, H., S. Lu, and J. Tybout 2003. Why plant-level productivity studies are often misleading, and an alternative approach to inference. Working Paper No. 9617. Cambridge, MA: National Bureau of Economic Research.
Keller, W. 2004. International technology diffusion. Journal of Economic Literature 42: 752–782.
Kravis, I. 1970. Trade as a handmaiden of growth: Similarities between the nineteenth and twentieth centuries. Economic Journal 80: 850–872.
Levine, R. 1997. Financial development and economic growth: Views and agenda. Journal of Economic Literature 35: 688–726.
Lewis, W. 1969. Aspects of tropical trade, 1883–1965. Stockholm: Almqvist and Wicksell.
Matsuyama, K. 1992. Agricultural productivity, comparative advantage, and economic growth. Journal of Economic Theory 58: 317–334.
Moran, T. 1998. Foreign direct investment and development. Washington, DC: Institute for International Economics.
NBER (National Bureau of Economic Research). 1974–78. Foreign trade regimes and economic development. New York: Columbia University Press.
Rhee, Y., B. Ross-Larson, and G. Pursell. 1984. Korea’s competitive edge: Managing the entry into world markets. Baltimore: Johns Hopkins University Press.
Rivera-Batiz, L., and P. Romer. 1991. Economic integration and endogenous growth. Quarterly Journal of Economics 106: 531–555.
Rodriguez, F., and D. Rodrik. 2001. Trade policy and economic growth: A skeptic’s guide to the cross-national evidence. In NBER macroeconomics annual 2000, ed. B. Bernanke and K. Rogoff. Cambridge, MA: MIT Press.
Rodrik, D. 1999. Making openness work: The new global economy and the developing countries. Washington, DC: Overseas Development Council.
Romer, P. 1993. Idea gaps and object gaps in economic development. Journal of Monetary Economics 32: 543–573.
Sachs, J., and A. Warner. 2001. The curse of natural resources. European Economic Review 45: 827–838.
Saggi, K. 2002. Trade, foreign direct investment, and international technology transfer: A survey. World Bank Research Observer 17: 191–235.
Sala-i-Martin, X. 1997. I just ran two million regressions. American Economic Review 87: 178–183.
Weinhold, D., and J. Rauch. 1999. Openness, specialization, and productivity growth in less developed countries. Canadian Journal of Economics 32: 1009–1027.
Young, A. 1991. Learning by doing and the dynamic effects of international trade. Quarterly Journal of Economics 106: 369–405.
Author information
Authors and Affiliations
Editor information
Copyright information
© 2018 Macmillan Publishers Ltd.
About this entry
Cite this entry
Rauch, J. (2018). Growth and International Trade. In: The New Palgrave Dictionary of Economics. Palgrave Macmillan, London. https://doi.org/10.1057/978-1-349-95189-5_825
Download citation
DOI: https://doi.org/10.1057/978-1-349-95189-5_825
Published:
Publisher Name: Palgrave Macmillan, London
Print ISBN: 978-1-349-95188-8
Online ISBN: 978-1-349-95189-5
eBook Packages: Economics and FinanceReference Module Humanities and Social SciencesReference Module Business, Economics and Social Sciences