Trade Openness and Volatility

Table A6. Correlation of Annual Output Growth per Worker with Rest of the Manufacturing
Sector: Panel Robustness Results

	(1)	(2)	(3)	(4)	(5)	(6)
Trade/Output	-0.022*	-0.021*	-0.048**	-0.026*	-0.053**	-0.018+
	(0.010)	(0.010)	(0.007)	(0.010)	(0.007)	(0.011)
Output per worker			0.008	-0.022	-0.020	-0.004
			(0.014)	(0.026)	(0.014)	(0.027)
Avg. output per worker	-0.019 (0.031)
Growth of output per worker		-0.010 (0.124)
Var(TOT)			-0.002 (0.003)
Var(Trade)				0.000 (0.004)
Share of manuf. trade					0.470** (0.046)
Liq. needs×Private credit/GDP						0.812** (0.309)
Observations	4161	4147	4117	4094	4133	3809
R²	0.672	0.672	0.055	0.684	0.078	0.712
^μt	yes	yes	no	yes	no	yes
^μc × ^μi	yes	yes	no	yes	no	yes
^μi × ^μt	no	no	yes	no	yes	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, 1970-99. All variables are in natural logs except for Liq. needs × Private credit/GDP
and Output per worker growth. ‘Liq. needs’ stands for Raddatz (2005)’s sector-level measure of liquidity needs, which
is inventories over sales, calculated using COMPUSTAT data. All variables are period averages, except for output
per worker which is the period’s initial value. μ_c denotes the country fixed effects. μ_i denotes the sector fixed effects.
All specifications are estimated using OLS.

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Trade Openness and Volatility

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