In search of scale effects in trade and growth

Research output: Contribution to journalArticle

130 Citations (Scopus)

Abstract

We look for the scale effects predicted by some theories of trade and growth based on the dynamic returns to scale that arise from learning by doing, investment in human capital, or development of new products. We find little empirical evidence of a relation between the growth rate of GDP per capita and the measures of scale implied by the theory. Restricting attention to the manufacturing sector, however, we find a significant relation between the growth rate of output per worker and the relevant scale variables. We also find that growth rates are significantly related to measures of intra-industry trade.

Original languageEnglish (US)
Pages (from-to)377-409
Number of pages33
JournalJournal of Economic Theory
Volume58
Issue number2
DOIs
StatePublished - Jan 1 1992

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Trade and growth
Scale effect
Learning-by-doing
Empirical evidence
Manufacturing sector
GDP per capita
Workers
Human development
New products
Intra-industry trade
Human capital
Returns to scale

Cite this

In search of scale effects in trade and growth. / Backus, David K.; Kehoe, Patrick J; Kehoe, Timothy J.

In: Journal of Economic Theory, Vol. 58, No. 2, 01.01.1992, p. 377-409.

Research output: Contribution to journalArticle

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