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Technological Convergence and International Trade

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  • Ben-David, Dan

Abstract

This paper builds on earlier evidence showing that, while most countries exhibit little evidence of unconditional income convergence, countries that trade heavily with one another tend to exhibit a much higher incidence of convergence. Two alternative explanations for the trade-related convergence are explored here. The first alternative is that the trade-related income convergence is due to a convergence in capital-labour ratios. Little support is found for this explanation. The other alternative examined here is that of a trade-related convergence in technologies. This alternative is corroborated by a high incidence of convergence in total factor productivities among countries that trade heavily with one another – an outcome that is not common between these same countries when they are grouped randomly rather than on the basis of trade.

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Bibliographic Info

Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 1359.

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Date of creation: Mar 1996
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Handle: RePEc:cpr:ceprdp:1359

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Keywords: Income Convergence; International Trade; Technology; TFP;

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Cited by:
  1. Juncal Cuñado, . "Convergencia real o acercamiento cíclico? España y la Unión Europea," Studies on the Spanish Economy 57, FEDEA.
  2. Jürgen Blazejczak (Hrsg.), 1998. "Zukunftsgestaltung ohne Wirtschaftswachstum?: Ergebnisse eines Workshops des DIW im Auftrag von Greenpeace Deutschland," Discussion Papers of DIW Berlin 168, DIW Berlin, German Institute for Economic Research.
  3. Michelle P. Connolly, 1997. "Technological diffusion through trade and imitation," Staff Reports 20, Federal Reserve Bank of New York.
  4. Haukioja, Teemu & Hahl, Jarmo, 2001. "The Emergence of the New Economy, and its Challenge to Financial Intermediation and Banking," Discussion Papers 772, The Research Institute of the Finnish Economy.
  5. Connolly, Michelle, 2003. "The dual nature of trade: measuring its impact on imitation and growth," Journal of Development Economics, Elsevier, vol. 72(1), pages 31-55, October.
  6. Michelle P. Connolly, 1998. "The dual nature of trade: measuring its impact on imitation and growth," Staff Reports 44, Federal Reserve Bank of New York.
  7. Florence Bouvet, 2010. "EMU and the dynamics of regional per capita income inequality in Europe," Journal of Economic Inequality, Springer, vol. 8(3), pages 323-344, September.
  8. A. N. Rambaldi & Iyer & K., 2004. "Measuring Spillovers from Alternative Forms of Foreign Investment," Econometric Society 2004 Australasian Meetings 149, Econometric Society.
  9. Kaitila, Ville, 2003. "Convergence of Real GDP per Capita in the EU15 area: How do the Accession Countries Fit in ?," Discussion Papers 865, The Research Institute of the Finnish Economy.
  10. Ville Kaitila, 2005. "Integration and Conditional Convergence in the Enlarged EU Area," Economics Working Papers 031, European Network of Economic Policy Research Institutes.
  11. Frankel, Jeffrey, 2004. "Real Convergence and Euro Adoption in Central and Eastern Europe: Trade and Business Cycle Correlations as Endogenous Criteria for Joining EMU," Working Paper Series rwp04-039, Harvard University, John F. Kennedy School of Government.

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