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Consequences of Imitation by Poor Countries on International Wage Inequalities and Global Growth

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  • Hans Jarle Kind

Abstract

The paper presents an endogenous growth model where the level of international transaction costs may be decisive for whether the relatively poor East specializes in agriculture production, imitates goods from the rich West, or makes its own innovations. The author shows that the East produces only agricultural goods if transaction costs are high, while innovation is profitable when transaction costs are low. In between there are a range of transaction costs where the East imitates, possibly resulting in a lower global growth rate and a larger international wage gap than if imitation were not possible. Copyright Blackwell Publishing Ltd 2004.

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Bibliographic Info

Article provided by Wiley Blackwell in its journal Review of Development Economics.

Volume (Year): 8 (2004)
Issue (Month): 1 (02)
Pages: 47-67

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Handle: RePEc:bla:rdevec:v:8:y:2004:i:1:p:47-67

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Web page: http://www.blackwellpublishing.com/journal.asp?ref=1363-6669

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Cited by:
  1. Dinopoulos, Elias & Segerstrom, Paul, 2003. "A Theory of North-South Trade and Globalization," CEPR Discussion Papers 4140, C.E.P.R. Discussion Papers.
  2. Metaxas, Theodore & Kechagia, Polyxeni, 2012. "F.D.I. through the imitation procedure The case of China: A Note," MPRA Paper 40886, University Library of Munich, Germany.

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