The relationship between trade and productivity

A feasibility study

September 2023

the relationship between productivity and trade_report cover

The aim of this feasibility study is to understand the evidence base on the role trade can play in facilitating growth and productivity at the UK national, sectoral, and firm level. To achieve this objective, this study has investigated the following f our research questions:

  • 1) What are the recent literature and empirical findings on the mechanisms that explain the relationship between the exporting / importing status of firms and their productivity, including how productivity is defined?
  • 2) How do strictly importing firms perform on productivity levels against strictly exporting firms? What, if any, are the impacts of trade frictions o n productivity?
  • 3) How can we quantify the impact of changes in trade on productivity a nd consequently impacts to the economy, businesses, and jobs of UK nations (i.e., Scotland, Wales, and Northern Ireland)/English regions?
  • 4) What are the different approaches to measuring the impact of trade on productivity at the UK, sector, and firm level?

Client: Department for Business & Trade

Authors: Holger Breinlich, Stefania Lovo, Robin Baker and Elitsa Garnizova

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