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

Abstract

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.