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Trade Liberalization and Technology Diffusion

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  • Kurt A. Hafner

Abstract

I first present a New Economic Geography model and analyze the impact of R&D on economic development of integrating countries. I find that technology diffusion and skilled labor migration stimulates economic development through fix cost reduction on a firm level. As the inclusion of foreign technology matters for structurally backward countries, I second use time series data for Greece, Portugal, Spain and Ireland representing European integration during the 1980s and 1990s. In considering three different technology diffusion channels, estimates, however, reduces to Portugal as test procedures confirm nonstationarity and cointegration only for this country. I find empirical evidence for bilateral trade as a diffusion channel but not for FDI or foreign patents.

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Bibliographic Info

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

Volume (Year): 19 (2011)
Issue (Month): 5 (November)
Pages: 963-978

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Handle: RePEc:bla:reviec:v:19:y:2011:i:5:p:963-978

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Cited by:
  1. Hafner, Kurt A., 2005. "Agglomeration, Migration and Tax Competition," BERG Working Paper Series 52, Bamberg University, Bamberg Economic Research Group.

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