Energy intensity , labor intensity , trade , technology diffusion , convergence , developing countries
Abstract:
We examine variations in the South-North ratios (emerging vs. industrialized countries)
of energy and labor intensities driven by imports. We use the novel World Input-Output
Database (WIOD) that provides bilateral and bisectoral data for 40 countries and 35
sectors for 1995-2009. We find South-North convergence of energy and labor intensities,
an energy bias of import-driven convergence and no robust difference between imports
of intermediate and investment goods. Accordingly, trade helps emerging economies
follow a ’green growth’ path, and trade-related policies can enhance this path. However,
the effects are economically small and require a long time horizon to become effective.
Trade-related policies can become much more effective in selected countries and sectors:
China attenuates labor intensity via imports of intermediate goods above average. Brazil
reduces energy intensity via imports of intermediate and investment goods above average.
Production of machinery as an importing sector in emerging countries can immoderately
benefit from trade-related reductions in factor intensities. Electrical equipment as a
traded good particularly decreases energy intensity. Machinery particularly dilutes
labor intensity. Our main results are statistically highly significant and robust across
specifications.
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