|**Table 5. Trade, diversi**<br>_Dependent variable normaliz_<br>_Estimation Method: GMM-IV_|**fication and**<br>_ed by per worke_<br>_System Estimat_<br>1|**sources of gr**<br>_r (5-year non-ov_<br>_or (Arellano and_<br>2|**owth: Prima**<br>_erlapping avera_<br>_Bover, 1995; B_<br>3|**ry vs. Manuf**<br>_ges)_<br>_lundell and Bon_<br>4|**acturing Exp**<br>_d,1998)_<br>5|**orts**<br>6|
|---|---|---|---|---|---|---|
||[]<br>Output per|[]<br>Capital per|[]<br>TFP|[]<br>Output per|[]<br>Capital per|[]<br>TFP|
||worker|worker||worker|worker||
|Initial GDP per worker|-0.022<sup>***</sup>|-0.010<sup>***</sup>|-0.013<sup>***</sup>|-0.018<sup>***</sup>|-0.006<sup>***</sup>|-0.010<sup>***</sup>|
|_(in logs)_|(0.000)|(0.000)|(0.000)|(0.000)|(0.000)|(0.000)|
|Exports, manufacturing|0.098<sup>***</sup>|0.086<sup>***</sup>|0.060<sup>***</sup>||||
|_(% of GDP)_|(0.000)|(0.000)|(0.000)||||
|Exports, primary|-0.002|-0.003|0.026<sup>***</sup>||||
|_(% of GDP)_|(0.827)|(0.725)|(0.000)||||
|Trade (X+M), manufacturing||||0.067<sup>***</sup>|0.061<sup>***</sup>|0.037<sup>***</sup>|
|<br>_(% of GDP)_||||(0.000)|(0.000)|(0.000)|
|Trade (X+M), primary||||-0.042<sup>***</sup>|-0.019<sup>***</sup>|-0.008<sup>*</sup>|
|<br>_(% of GDP)_||||(0.000)|(0.000)|(0.031)|
|Market Concentration|0.005<sup>**</sup>|0.008<sup>***</sup>|0.003<sup>**</sup>|0.006<sup>**</sup>|0.012<sup>***</sup>|0.005<sup>***</sup>|
|_(Herfindahl Index)_|(0.004)|(0.000)|(0.004)|(0.005)|(0.000)|(0.000)|
|Product Concentration|-0.020<sup>***</sup>|-0.016<sup>***</sup>|-0.011<sup>***</sup>|-0.020<sup>***</sup>|-0.019<sup>***</sup>|-0.012<sup>***</sup>|
|_(Herfindahl Index)_|(0.000)|(0.000)|(0.000)|(0.000)|(0.000)|(0.000)|
|Secondary enrollment rate|0.009<sup>***</sup>|-0.004<sup>*</sup>|0.003<sup>***</sup>|0.008<sup>***</sup>|-0.006<sup>***</sup>|0.002<sup>***</sup>|
|<br>_(initial level, logs)_|(0.000)|(0.011)|(0.000)|(0.000)|(0.001)|(0.000)|
|ICRG Political Risk Index|0.004<sup>***</sup>|0.000|0.004<sup>***</sup>|0.003<sup>***</sup>|-0.000|0.004<sup>***</sup>|
|_(principal components)_|(0.000)|(0.734)|(0.000)|(0.000)|(0.491)|(0.000)|
|Credit to private sector|-0.017<sup>***</sup>|-0.009<sup>***</sup>|-0.011<sup>***</sup>|-0.019<sup>***</sup>|-0.010<sup>***</sup>|-0.012<sup>***</sup>|
|_(% of GDP)_|(0.000)|(0.000)|(0.000)|(0.000)|(0.000)|(0.000)|
|Government consumption|0.011<sup>***</sup>|0.016<sup>***</sup>|-0.004<sup>*</sup>|0.005<sup>***</sup>|0.011<sup>***</sup>|-0.007<sup>***</sup>|
|_(% of GDP)_|(0.000)|(0.000)|(0.019)|(0.000)|(0.000)|(0.000)|
|Growth volatility|0.156<sup>***</sup>|-0.039<sup>*</sup>|-0.007|0.221<sup>***</sup>|-0.016|-0.005|
|<br>_(S.D. growth per worker)_|(0.000)|(0.014)|(0.580)|(0.000)|(0.268)|(0.763)|
|Constant|0.181<sup>***</sup>|0.092<sup>***</sup>|0.140<sup>***</sup>|0.170<sup>***</sup>|0.077<sup>***</sup>|0.133<sup>***</sup>|
||(0.000)|(0.000)|(0.000)|(0.000)|(0.000)|(0.000)|
|Observations|<br>595|<br>595|<br>595|<br>589|<br>589|<br>589|
|_AR(1)_|0.003|0.239|0.000|0.002|0.678|0.000|
|<br>_AR(2)_|0.516|0.006|0.878|0.676|0.009|0.948|
|<br>_Hansen_<br>_p_-values in parentheses<br>* _p_ <0.05,** _p_ <0.01,*** _p_ <|0.724<br>0.001|0.417|0.515|0.689|0.464|0.538|

Our coefficient estimates in columns [5] and [6] of Table 5 suggest the following economic interpretation: first, doubling trade in manufacturing goods would accelerate growth of physical capital per worker and TFP growth in Sub-Saharan Africa by 1.3 and 0.8 percentage points per year, respectively. Second, doubling trade in primary goods would decelerate growth of physical capital per worker and TFP growth in Sub-Saharan Africa by 0.4 and 0.2 percentage points per year, respectively. We should note that the evidence is consistent with: first, the success of manufacturing export-led growth strategies in East Asia, where exports provided a basis for learning (transfer of technology, knowledge spillovers to 19