IDEAS home Printed from https://ideas.repec.org/a/bas/econst/y2018i3p37-66.html
   My bibliography  Save this article

Growth, Research, and Free Trade with Knowledge as Global Public Capital

Author

Listed:
  • Wei-Bin Zhang

Abstract

The purpose of this study is to explain dynamics of global growth and trade patterns with wealth and utilizing knowledge as basic determinants. It builds a multi-country growth model with economic structure and research. Global economy composes of any number of countries and each country has one production sector and one university. Knowledge is through learning by doing and research. Knowledge is global public good and is applied by countries with different utilization efficiencies. The production sector is the same as in the one-sector growth Solow model (Solow, 1956), while capital mobility and trade patterns are determined like in the Oniki-Uzawa model (Oniki and Uzawa, 1956). We use a utility function proposed by Zhang (1993) to determines saving and consumption. The movement of the system is given by differential equations. We simulate the model. Our comparative analysis provides some insights into the complexity of international trade with endogenous wealth and knowledge.

Suggested Citation

  • Wei-Bin Zhang, 2018. "Growth, Research, and Free Trade with Knowledge as Global Public Capital," Economic Studies journal, Bulgarian Academy of Sciences - Economic Research Institute, issue 3, pages 37-66.
    • Handle: RePEc:bas:econst:y:2018:i:3:p:37-66
    as

    Download full text from publisher

    File URL: https://www.ceeol.com/search/article-detail?id=695655
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Bresnahan, Timothy F. & Trajtenberg, M., 1995. "General purpose technologies 'Engines of growth'?," Journal of Econometrics, Elsevier, vol. 65(1), pages 83-108, January.
    2. Wei-Bin Zhang, 2012. "Capital Accumulation, Technological Progress and Environmental Change in a Three-Sector Growth Model," International Journal of Information Systems and Social Change (IJISSC), IGI Global, vol. 3(3), pages 1-18, July.
    3. Paul Krugman & Anthony J. Venables, 1995. "Globalization and the Inequality of Nations," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 110(4), pages 857-880.
    4. Richard R. Nelson, 2002. "special issue: Bringing institutions into evolutionary growth theory," Journal of Evolutionary Economics, Springer, vol. 12(1), pages 17-28.
    5. Hinloopen, Jeroen & Smrkolj, Grega & Wagener, Florian, 2013. "From mind to market: A global, dynamic analysis of R&D," Journal of Economic Dynamics and Control, Elsevier, vol. 37(12), pages 2729-2754.
    6. Mansfield, Edwin, 1998. "Academic research and industrial innovation: An update of empirical findings1," Research Policy, Elsevier, vol. 26(7-8), pages 773-776, April.
    7. Attila Varga & Luc Anselin & Zoltan J. Acs, 2000. "research notes and comments: Geographic and sectoral characteristics of academic knowledge externalities," Papers in Regional Science, Springer;Regional Science Association International, vol. 79(4), pages 435-443.
    8. Robert M. Solow, 1956. "A Contribution to the Theory of Economic Growth," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 70(1), pages 65-94.
    9. Martin, Philippe & Ottaviano, Gianmarco I P, 2001. "Growth and Agglomeration," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 42(4), pages 947-968, November.
    10. Richard A. Brecher & Zhiqi Chen & Ehsan U. Choudhri, 2002. "Absolute and Comparative Advantage, Reconsidered: The Pattern of International Trade with Optimal Saving," Review of International Economics, Wiley Blackwell, vol. 10(4), pages 645-656, November.
    11. Iacopetta, Maurizio, 2011. "Formal education and public knowledge," Journal of Economic Dynamics and Control, Elsevier, vol. 35(5), pages 676-693, May.
    12. Adam B. Jaffe & Manuel Trajtenberg & Rebecca Henderson, 1993. "Geographic Localization of Knowledge Spillovers as Evidenced by Patent Citations," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 108(3), pages 577-598.
    13. G. M.P. Swann, 2009. "The Economics of Innovation," Books, Edward Elgar Publishing, number 13211.
    14. Philippe Aghion & Richard Blundell & Rachel Griffith & Peter Howitt & Susanne Prantl, 2009. "The Effects of Entry on Incumbent Innovation and Productivity," The Review of Economics and Statistics, MIT Press, vol. 91(1), pages 20-32, February.
    15. Vellutini, Charles, 2003. "Capital mobility and underdevelopment traps," Journal of Development Economics, Elsevier, vol. 71(2), pages 435-462, August.
    16. Cozzi, Guido & Galli, Silvia, 2011. "Privatization of Knowledge: Did the U.S. Get It Right? (New Version)," MPRA Paper 29710, University Library of Munich, Germany.
    17. Kazuo Nishimura & Koji Shimomura, 2012. "Trade and Indeterminacy in a Dynamic General Equilibrium Model," Springer Books, in: John Stachurski & Alain Venditti & Makoto Yano (ed.), Nonlinear Dynamics in Equilibrium Models, edition 127, chapter 0, pages 347-361, Springer.
    18. Luc Anselin & Attila Varga & Zoltan Acs, 2008. "Local Geographic Spillovers Between University Research and High Technology Innovations," Chapters, in: Entrepreneurship, Growth and Public Policy, chapter 9, pages 95-121, Edward Elgar Publishing.
    19. Jaffe, Adam B, 1989. "Real Effects of Academic Research," American Economic Review, American Economic Association, vol. 79(5), pages 957-970, December.
    20. Zoltan J. Acs & David B. Audretsch & Maryann P. Feldman, 2008. "Real Effects of Academic Research: Comment," Chapters, in: Entrepreneurship, Growth and Public Policy, chapter 7, pages 83-87, Edward Elgar Publishing.
    21. J. Vernon Henderson, 2001. "Marshall's Scale Economies," Working Papers 2001-46, Brown University, Department of Economics.
    22. Manasse, Paolo & Turrini, Alessandro, 2001. "Trade, wages, and 'superstars'," Journal of International Economics, Elsevier, vol. 54(1), pages 97-117, June.
    23. H. Oniki & H. Uzawa, 1965. "Patterns of Trade and Investment in a Dynamic Model of International Trade," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 32(1), pages 15-37.
    24. Zhang, Wei-Bin, 1992. "Trade and world economic growth : Differences in knowledge utilization and creativity," Economics Letters, Elsevier, vol. 39(2), pages 199-206, June.
    25. Hans Gersbach & Maik Schneider & Olivier Schneller, 2013. "Basic research, openness, and convergence," Journal of Economic Growth, Springer, vol. 18(1), pages 33-68, March.
    26. Brecher, Richard A & Chen, Zhiqi & Choudhri, Ehsan U, 2002. "Absolute and Comparative Advantage, Reconsidered: The Pattern of International Trade with Optimal Saving," Review of International Economics, Wiley Blackwell, vol. 10(4), pages 645-656, November.
    27. Ethier, Wilfred J. & Svensson, Lars E. O., 1986. "The theoremes of international trade with factor mobility," Journal of International Economics, Elsevier, vol. 20(1-2), pages 21-42, February.
    28. Guido Cozzi & Silvia Galli, 2009. "Science‐Based R&D In Schumpeterian Growth," Scottish Journal of Political Economy, Scottish Economic Society, vol. 56(4), pages 474-491, September.
    29. Findlay, Ronald, 1984. "Growth and development in trade models," Handbook of International Economics, in: R. W. Jones & P. B. Kenen (ed.), Handbook of International Economics, edition 1, volume 1, chapter 4, pages 185-236, Elsevier.
    30. Henderson, J. Vernon, 2003. "Marshall's scale economies," Journal of Urban Economics, Elsevier, vol. 53(1), pages 1-28, January.
    31. Johnson, Harry G., 1971. "Trade and growth : A geometrical exposition," Journal of International Economics, Elsevier, vol. 1(1), pages 83-101, February.
    32. Park, Walter G., 1998. "A theoretical model of government research and growth," Journal of Economic Behavior & Organization, Elsevier, vol. 34(1), pages 69-85, January.
    33. Ikeda, Shinsuke & Ono, Yoshiyasu, 1992. "Macroeconomic Dynamics in a Multi-country Economy: A Dynamic Optimization Approach," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 33(3), pages 629-644, August.
    34. Adams, James D, 1990. "Fundamental Stocks of Knowledge and Productivity Growth," Journal of Political Economy, University of Chicago Press, vol. 98(4), pages 673-702, August.
    35. Nocco, Antonella, 2005. "The rise and fall of regional inequalities with technological differences and knowledge spillovers," Regional Science and Urban Economics, Elsevier, vol. 35(5), pages 542-569, September.
    36. Chari, V V & Hopenhayn, Hugo, 1991. "Vintage Human Capital, Growth, and the Diffusion of New Technology," Journal of Political Economy, University of Chicago Press, vol. 99(6), pages 1142-1165, December.
    37. Wei-Bin Zhang, 2008. "International Trade Theory," Springer Books, Springer, number 978-3-540-78265-0, December.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Zhang Wei-Bin, 2017. "A Multi-Country Trade and Tourism with Endogenous Capital and Knowledge," Business Systems Research, Sciendo, vol. 8(1), pages 71-91, March.
    2. Wei-Bin Zhang, 2011. "Global Economic Growth, Elastic Labor Supply, Knowledge Utilization And Creation With Learning-By-Doing," Analele Stiintifice ale Universitatii "Alexandru Ioan Cuza" din Iasi - Stiinte Economice (1954-2015), Alexandru Ioan Cuza University, Faculty of Economics and Business Administration, vol. 58, pages 497-512, november.
    3. Zhang, Wei-Bin, 2017. "Endogenous wealth and knowledge in Heckscher-Ohlin theory," International Journal of Development and Conflict, Gokhale Institute of Politics and Economics, vol. 7(2), pages 119-137.
    4. Hans Gersbach & Maik Schneider & Olivier Schneller, 2013. "Basic research, openness, and convergence," Journal of Economic Growth, Springer, vol. 18(1), pages 33-68, March.
    5. Hans Gersbach & Ulrich Schetter & Maik T. Schneider, 2021. "Macroeconomic Rationales For Public Investments In Science," Economic Inquiry, Western Economic Association International, vol. 59(2), pages 575-599, April.
    6. Gersbach, Hans & Sorger, Gerhard & Amon, Christian, 2018. "Hierarchical growth: Basic and applied research," Journal of Economic Dynamics and Control, Elsevier, vol. 90(C), pages 434-459.
    7. Wei-Bin Zhang, 2015. "National Education and Global Economic Growth: A Synthesis of the Uzawa–Lucas Two-Sector and the Oniki–Uzawa Trade Models," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 6(4), pages 905-928, December.
    8. Beaudry, Catherine & Schiffauerova, Andrea, 2009. "Who's right, Marshall or Jacobs? The localization versus urbanization debate," Research Policy, Elsevier, vol. 38(2), pages 318-337, March.
    9. Ufuk Akcigit & Douglas Hanley & Nicolas Serrano-Velarde, 2021. "Back to Basics: Basic Research Spillovers, Innovation Policy, and Growth," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 88(1), pages 1-43.
    10. Cabrer-Borras, Bernardi & Serrano-Domingo, Guadalupe, 2007. "Innovation and R&D spillover effects in Spanish regions: A spatial approach," Research Policy, Elsevier, vol. 36(9), pages 1357-1371, November.
    11. Wei-Bin ZHANG, 2016. "Tourism and economic structural change with endogenous wealth and human capital and elastic labor supply," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 0(4(609), W), pages 103-126, Winter.
    12. Gersbach, Hans & Schneider, Maik T., 2015. "On the global supply of basic research," Journal of Monetary Economics, Elsevier, vol. 75(C), pages 123-137.
    13. Wei-Bin Zhang, 2014. "National and International Inequalities in Income and Wealth in a Global Growth with Free Trade and National Inflation Policies," Global Economic Observer, "Nicolae Titulescu" University of Bucharest, Faculty of Economic Sciences;Institute for World Economy of the Romanian Academy, vol. 2(1), pages 22-40, May.
    14. Wei-Bin Zhang, 2014. "Capital and Knowledge: Integrating Arrow’s Learning-by-Doing, the Walrasian Equilibrium Theory and Neoclassical Growth Theory," South Asian Journal of Macroeconomics and Public Finance, , vol. 3(2), pages 267-293, December.
    15. Wei-Bin Zhang, 2014. "Global Economic Growth and Environmental Change," SPOUDAI Journal of Economics and Business, SPOUDAI Journal of Economics and Business, University of Piraeus, vol. 64(3), pages 3-29, July-Sept.
    16. Wei-Bin ZHANG, 2016. "Tourism and economic structural change with endogenous wealth and human capital and elastic labor supply," Theoretical and Applied Economics, Asociatia Generala a Economistilor din Romania - AGER, vol. 0(4(609), W), pages 103-126, Winter.
    17. Cohen, Wesley M., 2010. "Fifty Years of Empirical Studies of Innovative Activity and Performance," Handbook of the Economics of Innovation, in: Bronwyn H. Hall & Nathan Rosenberg (ed.), Handbook of the Economics of Innovation, edition 1, volume 1, chapter 0, pages 129-213, Elsevier.
    18. Marta Aloi & Joanna Poyago-Theotoky & Frédéric Tournemaine, 2022. "The Geography of Knowledge and R&D-led Growth [Real effects ofacademic research: comment]," Journal of Economic Geography, Oxford University Press, vol. 22(6), pages 1149-1190.
    19. Federico Caviggioli & Alessandra Colombelli & Antonio De Marco & Giuseppe Scellato & Elisa Ughetto, 2023. "Co-evolution patterns of university patenting and technological specialization in European regions," The Journal of Technology Transfer, Springer, vol. 48(1), pages 216-239, February.
    20. Haifeng Qian, 2013. "Diversity Versus Tolerance: The Social Drivers of Innovation and Entrepreneurship in US Cities," Urban Studies, Urban Studies Journal Limited, vol. 50(13), pages 2718-2735, October.

    More about this item

    JEL classification:

    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bas:econst:y:2018:i:3:p:37-66. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Diana Dimitrova (email available below). General contact details of provider: https://edirc.repec.org/data/ikbasbg.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.