Trade Openness and Volatility



Table 4. Correlation of Annual Output Growth per Worker with the Rest of the Manufacturing
Sector: Cross-Section Results

(1)          (2)         (3)         (4)

Trade/Output

-0.026**

-0.057**

-0.004

-0.028**

(0.007)

(0.009)

(0.007)

(0.010)

Output per worker

0.007

0.013

-0.021*

-0.046**

(0.010)

(0.014)

(0.010)

(0.017)

Observations

1515

1515

1515

1515

R2

0.013

0.097

0.306

0.371

μc

no

no

yes

yes

μi___________________

no

yes

no

yes

Notes: Robust standard errors in parentheses. + significant at 10%; * significant at 5%; ** significant at 1%. The
sample period is 1970-99. The dependent variable is the correlation of the growth rate of output per worker with
the rest of the manufacturing sector, 1970-99. All regressors are in natural logs, trade/output is the period average,
and output per worker is the period’s initial value.
μc denotes the country fixed effects. μi denotes the sector fixed
effects. All specifications are estimated using OLS.

Table 5. Correlation of Annual Output Growth per Worker with the Rest of the Manufacturing
Sector: Panel Results

(1)

(2)

(3)

(4)

(5)

(6)

(7)

Trade/Output

-0.029**

-0.043**

-0.026**

-0.043**

-0.037**

-0.056**

-0.021*

(0.005)

(0.006)

(0.005)

(0.007)

(0.007)

(0.008)

(0.010)

Output per worker

-0.019+

0.005

-0.046**

-0.049**

-0.068**

-0.043*

-0.007

(0.010)

(0.014)

(0.011)

(0.018)

(0.018)

(0.018)

(0.025)

Observations

4161

4161

4161

4161

4161

4161

4161

R2

0.009

0.041

0.174

0.202

0.271

0.215

0.672

μt

yes

yes

yes

yes

no

no

yes

μc

no

no

yes

yes

yes

no

no

μi

no

yes

no

yes

no

yes

no

μc × μi

no

no

no

no

no

no

yes

μc × μt

no

no

no

no

no

yes

no

μi × μt

no

no

no

no

yes

no

no

Notes: Robust standard errors in parentheses. + significant at 10%; * significant at 5%; ** significant at 1%. The
sample period is 1970-99. The dependent variable is the correlation of the growth rate of output per worker with
the rest of the manufacturing sector over ten-year periods: 1970-79, 1980-89, 1990-99. All regressors are in natural
logs, trade/output is averaged over the ten-year periods, and output per worker is the ten-year period’s initial value.
μc denotes the country fixed effects. μi denotes the sector fixed effects. All specifications are estimated using OLS.

26



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