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Trade liberalization, democratization, and technology adoption

Author

Listed:
  • Matteo Cervellati

    (University of Bologna
    IZA
    CEPR
    CESIfo)

  • Alireza Naghavi

    (University of Bologna)

  • Farid Toubal

    (ENS de Paris-Saclay
    CREST
    CEPII)

Abstract

A general equilibrium theory with heterogeneous skills predicts a complementarity between trade and democracy in creating demand for superior technologies. Trade liberalization or democratization alone may lead to vested interests that limit technology adoption. We use panel data on technology adoption, at a disaggregated level, for the period 1980–2000. Exploiting within-country variation over time and the heterogeneous timing of trade liberalization and democratization, we document a significant and sizable positive interaction between trade openness and democratization for technology adoption. The result that transitions to open democracies are beneficial for technological dynamics is robust to a large set of checks.

Suggested Citation

  • Matteo Cervellati & Alireza Naghavi & Farid Toubal, 2018. "Trade liberalization, democratization, and technology adoption," Journal of Economic Growth, Springer, vol. 23(2), pages 145-173, June.
    • Handle: RePEc:kap:jecgro:v:23:y:2018:i:2:d:10.1007_s10887-018-9155-5
    DOI: 10.1007/s10887-018-9155-5
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    3. Jorge Braga Macedo & Joaquim Oliveira Martins & João Tovar Jalles, 2021. "Globalization, Freedoms and Economic convergence: an empirical exploration of a trivariate relationship using a large panel," International Economics and Economic Policy, Springer, vol. 18(3), pages 605-629, July.
    4. Isotta Mac Fadden & Monica Santana & Esteban Vázquez-Cano & Eloy López-Meneses, 2021. "A science mapping analysis of ‘marginality, stigmatization and social cohesion’ in WoS (1963–2019)," Quality & Quantity: International Journal of Methodology, Springer, vol. 55(1), pages 275-293, February.
    5. Park, Jun-ki & Ryu, Deockhyun & Lee, Keun, 2019. "What determines the economic size of a nation in the world: Determinants of a nation’s share in world GDP vs. per capita GDP," Structural Change and Economic Dynamics, Elsevier, vol. 51(C), pages 203-214.
    6. Michele Battisti & Filippo Belloc & Massimo Del Gatto, 2017. "Technology-specific Production Functions," Working Paper series 17-26, Rimini Centre for Economic Analysis.
    7. Michiel Gerritse, 2015. "Does trade cause long-run development? Theory and evidence from countries behind the Suez channel," ERSA conference papers ersa15p1100, European Regional Science Association.
    8. Jayasekara, Dinithi N. & Fredriksson, Per G., 2021. "Culture, intellectual property rights, and technology adoption," The Quarterly Review of Economics and Finance, Elsevier, vol. 80(C), pages 317-330.
    9. Lu, Zhou & Mahalik, Mantu Kumar & Mahalik, Hrushikesh & Zhao, Rui, 2022. "The moderating effects of democracy and technology adoption on the relationship between trade liberalisation and carbon emissions," Technological Forecasting and Social Change, Elsevier, vol. 180(C).
    10. Carroni, Elias & Delogu, Marco & Pulina, Giuseppe, 2023. "Technology adoption and specialized labor," International Economics, Elsevier, vol. 173(C), pages 249-259.
    11. Okada, Keisuke & Samreth, Sovannroeun, 2020. "Do political regimes matter for technology diffusion?," MPRA Paper 103728, University Library of Munich, Germany.
    12. Rabah Arezki & Vianney Dequiedt & Rachel Yuting Fan & Carlo Maria Rossotto, 2021. "Working Paper 352 - Liberalization, Technology Adoption, and Stock Returns: Evidence from Telecom," Working Paper Series 2478, African Development Bank.
    13. Oyèkọ́lá, Ọláyínká, 2021. "Where do people live longer?," Research in Economics, Elsevier, vol. 75(1), pages 21-44.

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    More about this item

    Keywords

    Trade liberalization; Democratization; Political economy theory; Technology adoption; Disaggregated panel data; Within country variation;
    All these keywords.

    JEL classification:

    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • P51 - Political Economy and Comparative Economic Systems - - Comparative Economic Systems - - - Comparative Analysis of Economic Systems
    • F59 - International Economics - - International Relations, National Security, and International Political Economy - - - Other

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