Ulf Lewrick

Productivity growth from an international trade perspective

This paper presents a framework to assess the relative importance of three key sources of productivity growth that international trade research focuses on: (1) inter-industry specialization; (2) intra-industry reallocation of resources across heterogeneous firms; and (3) technological progress. We illustrate how to apply the framework by deciphering the productivity dynamics of the Swiss manufacturing industry. We find that intra-industry reallocations are the most important source of growth in aggregate total factor productivity, spurred by the productivity growth of large, incumbent firms and the entry of new firms. Inter-industry specialization and general technological progress, nevertheless, remain important supplementary sources of productivity growth.

Trade in variety and domestic production: Evidence from US manufacturing

Welfare gains from increasing product variety are an important source of the gains from international trade. Previous empirical studies, however, typically focus on measuring gains from imported varieties. This paper introduces a measure to analyze changes in domestically produced varieties to estimate the total variety gains. Our analysis suggests that, for US manufacturing, losses in domestic varieties from 1992 to 2006 seem substantial given the large decline in the number of US establishments. Yet, once we account for the reallocation of resources towards large multi-variety firms, we find considerable domestic variety gains, adding to those from imported varieties.