In this model of North and South economies, growth is driven by Schumpeterian R&D and by accumulation of two types of human capital, versatile and specialized. The former is school intensive while the latter is on-the-job-training intensive. Growth is endogenous and independent of scale effects. South's imitation of existing technology is conditional to the distance to the technological frontier. Growth depends on technological advances in the quality of available intermediate goods, regardless of the origin - innovation or imitation -, and not on comparative advantage in the production of final goods. By allowing immediate international access of the state-of-the-art intermediate goods, trade affects the productive structure in the South, bringing about partial convergence to the Northern structure and prices. Nevertheless, even when the countries have access to the same technology - either through imitation or trade of intermediate goods -, differences in domestic institutions and human capital imply differences in productivity. In addition, trade induces steady-state effects through the price channel, by which the specific types of human capital influence the direction of technological progress. The consideration of two types of human capital also allows the study of wage inequality effects of trade, as well as the derivation of a Schumpeterian dynamic equivalent to the static Stolper-Samuelson factor price equalization result.
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Paper provided by DEGIT, Dynamics, Economic Growth, and International Trade in its series DEGIT Conference Papers with number
c008_013.
Find related papers by JEL classification: F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies O31 - Economic Development, Technological Change, and Growth - - Technological Change - - - Innovation and Invention: Processes and Incentives O47 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Measurement of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
References listed on IDEAS Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
Coe, David T & Helpman, Elhanan & Hoffmaister, Alexander, 1995.
"North-South R&D Spillovers,"
CEPR Discussion Papers
1133, C.E.P.R. Discussion Papers.
[Downloadable!] (restricted)
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David T. Coe & Elhanan Helpman & Alexander Hoffmaister, 1995.
"North-South R&D Spillovers,"
NBER Working Papers
5048, National Bureau of Economic Research, Inc.
[Downloadable!] (restricted)
Acemoglu, Daron & Zilibotti, Fabrizio, 1998.
"Productivity Differences,"
Seminar Papers
660, Stockholm University, Institute for International Economic Studies.
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