We estimate the effect of international trade on average labour productivity across countries. Our empirical approach … empirical grounds. In contrast to the marginally significant and non-robust effects of trade on productivity found previously … productivity. Our finding is that trade works through labour efficiency, while institutional quality works through physical and …

Estimates for the US suggest that at least in some sectors productivity-enhancing reallocation is the dominant factor … in accounting for productivity growth. An open question, particularly relevant for developing countries, is whether … reallocation is always productivity enhancing. It may be that imperfect competition or other barriers to competitive environments …