Productivity effects of trade in natural resources-comparison with mechanisms of technological specialisation

This paper compares two alternative growth paths, assessing the effects on productivity of specialisation in natural resources (NR) and in technologically advanced products. The empirical analysis exploits product-level export data for 109 developing and 51 developed economies over the period 1996-2018. We document two distinct types of specialisation, based on exports either of natural resources or of technological products, and compare their role in labour productivity growth by GMM estimation of a conditional convergence model. In general, natural resource exports weakly slow down growth but we find that the type of resources exported is important: Metals enhance productivity catch-up and can stimulate growth in developing countries. Technological specialisation, especially in products typical of the Fourth Industrial Revolution, reinforces productivity growth but does not affect natural resources-productivity growth relationship.

Automated summary

This paper compares two alternative growth paths – specialisation in natural resources and specialisation in technologically advanced products – and evaluates their effects on productivity. The empirical analysis, based on product-level export data from 109 developing and 51 developed economies between 1996 and 2018, identifies two distinct types of specialisation and examines their roles in labour productivity growth using GMM estimation. The findings show that while natural resource exports weakly slow down growth, the type of resources exported is crucial, with metals enhancing productivity catch-up and stimulating growth in developing countries. Technological specialisation, particularly in Fourth Industrial Revolution products, reinforces productivity growth but does not impact the relationship between natural resources and productivity growth.