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Can Trade Really Hurt? An Empirical Follow-Up On Samuelson'S Controversial Paper

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  • JÜRGEN BITZER
  • HOLGER GÖRG
  • PHILIPP J.H. SCHRÖDER

Abstract

This paper investigates Samuelson's (JEP, 2004) argument that technical progress of the trade partner may hurt the home country. We illustrate this prospect in a simple Ricardian model for sitations with outward knowledge spillovers. Within this framework Samuelson's "Act II" effects may occur. Based on industry level panel data for seventeen OECD countries for the period 1973 to 2000 we show econometrically that the outflow of domestic knowledge via exports or FDI may have a negative impact on industry output in the home country. This is particularly so when exporting to technological less advanced oountries and, more specifically, China

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Bibliographic Info

Article provided by Western Economic Association International in its journal Economic Inquiry.

Volume (Year): 50 (2012)
Issue (Month): 3 (07)
Pages: 724-738

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Handle: RePEc:bla:ecinqu:v:50:y:2012:i:3:p:724-738

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References

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Cited by:
  1. Julian di Giovanni & Andrei A. Levchenko & Jing Zhang, 2013. "The global welfare impact of China: trade integration and technological change," Working Paper Series WP-2013-08, Federal Reserve Bank of Chicago.
  2. Jing Zhang, 2013. "Global Welfare Impact of China: Trade Integration and Technology Change," 2013 Meeting Papers 630, Society for Economic Dynamics.

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