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North-South technology diffusion, regional integration, and the dynamics of the “natural trading partners” hypothesis

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  • Maurice Schiff
  • Yanling Wang

Abstract

Based on static analysis, a number of studies argue that forming a regional trade agreement (RTA) is more likely to raise welfare if member countries are ?natural trading partners,? while other studies claim the opposite. This paper considers the argument from a dynamic viewpoint by examining the impact of trade with Japan, North America and the EU on technology diffusion and total factor productivity (TFP) in Jordan, Korea and Mexico. Using industry-level data, we show that: i) technology diffusion and productivity gains tend to be regional: Jordan, Korea, and Mexico tend to benefit mainly from trade with the EU, Japan, and North America respectively; and ii) the dynamic version of the ?natural trading partners? hypothesis seems to hold. JEL Classification: F02, F13, F15, F43, O39

Suggested Citation

  • Maurice Schiff & Yanling Wang, 2007. "North-South technology diffusion, regional integration, and the dynamics of the “natural trading partners” hypothesis," Revue d’économie du développement, De Boeck Université, vol. 15(5), pages 69-84.
    • Handle: RePEc:cai:edddbu:edd_215_0069
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    1. Lawrence H. Summers, 1991. "Regionalism and the world trading system," Proceedings - Economic Policy Symposium - Jackson Hole, Federal Reserve Bank of Kansas City, pages 295-301.
    2. Mr. David T. Coe & Mr. Willy A Hoffmaister, 1999. "Are There International R&D Spillovers Among Randomly Matched Trade Partners? A Response to Keller," IMF Working Papers 1999/018, International Monetary Fund.
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    Cited by:

    1. Alberto Behar & Laia Cirera-i-Crivillé, 2013. "Does it Matter Who You Sign With? Comparing the Impacts of North–South and South–South Trade Agreements on Bilateral Trade," Review of International Economics, Wiley Blackwell, vol. 21(4), pages 765-782, September.
    2. Yanling Wang, 2007. "Trade, Human Capital, and Technology Spillovers: an Industry‐level Analysis," Review of International Economics, Wiley Blackwell, vol. 15(2), pages 269-283, May.
    3. Park, Gayoung & Dreamson, Neal, 2023. "The heterogeneous effects of human development and good governance on mobile diffusion in the sub-Saharan region: Evidence from panel quantile regression," Technological Forecasting and Social Change, Elsevier, vol. 189(C).

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    More about this item

    Keywords

    North-South technology diffusion; productivity; regional integration; natural trading partners; Korea; Mexico;
    All these keywords.

    JEL classification:

    • F02 - International Economics - - General - - - International Economic Order and Integration
    • F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
    • F15 - International Economics - - Trade - - - Economic Integration
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • O39 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Other

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