The theoretical link between trade and productivity

Abstract

This chapter presents the analysis of theoretical link between trade and productivity. Old and new trade theories, the theory of economic growth are main theories used for the analysis of trade-productivity link in the paper. In the paper trade-productivity link is analysed on different levels. On macroeconomic level the role of international trade to productivity is emphasized via import and export. Productivity change which may lead to expand countries exports and channels, through which productivity levels are interrelated, are shortly overviewed. On microeconomic level the link between trade and firm’s productivity is introduced. Thinking about exporters, which need to have higher productivity level, exportproductivity premia is examined. Two most important events are recorded in history. There is the first view that the world trade was fragmented and completely nonglobalized before the 19th century, and second contrasting view about trade is globalisation and liberalisation after late 19th century. So, the effects that are delivered before and after trade liberalisation are shortly discussed in the paper as well.