Technology, specialisation and productivity in manufacturing industry

Abstract

The aim of this study is to provide evidence on the relation between specialisation patterns and productivity in manufacturing industry of thirty nine countries, both developed and underdeveloped, from 1981 to 2003. In particular this study explores either "absolute specialisation" or "technological specialisation" in both production and trade is more important in explaining productivity differences among countries by making use of panel data modeling. Descriptive findings show that high/low technology, intensive manufacturing industry production and trade increased/decreased from 1980s to 2000s in the world. The panel data estimation results show a positive association between absolute specialisation in production and labour productivity, but negative relation with specialisation in exports. Moreover; this study demonstrates that technological specialisation in both production and trade is more important than absolute specialisation far enhanced productivity which is the main source of growth.