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Absorption Capacity, Structural Similarity and Embodied Technology Spillovers in a 'Macro' Model: An Implementation Within the GTAP Framework

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Author Info
Gouranga Gopal Das
Alan A. Powell

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Abstract

In this paper, all technology transfers are embodied in trade flows within a three-region, one-traded-commodity version of the GTAP model. Exogenous Hicks-Neutral technical progress in one region can have uneven impacts on productivity elsewhere. Why? Destination regions' ability to harness new technology depends on their absorptive capacity and on the structural congruence of the source and destination. Together with trade volume, these two factors determine the recipient's spillover coefficient (which measures its success in capturing foreign technology). Armington competition between the outputs of the three economies and shifts in their terms of trade loom large in the general equilibrium adjustment.

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Paper provided by Monash University, Centre of Policy Studies/IMPACT Centre in its series Centre of Policy Studies/IMPACT Centre Working Papers with number ip-77.

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Date of creation: Dec 2000
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Handle: RePEc:cop:wpaper:ip-77

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Find related papers by JEL classification:
D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models
F11 - International Economics - - Trade - - - Neoclassical Models of Trade
F41 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Open Economy Macroeconomics
O49 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Other

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  1. Eaton, Jonathan & Kortum, Samuel, 1996. "Trade in ideas Patenting and productivity in the OECD," Journal of International Economics, Elsevier, vol. 40(3-4), pages 251-278, May. [Downloadable!] (restricted)
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