Impact of Imported Intermediate and Capital Goods on Economic Growth: A Cross Country Analysis
AbstractKnowledge accumulation in the richer countries provides them with comparative advantages in higher productivity products. The countries that import the higher productivity intermediate products and capital equipments produced in the richer countries, however, derive benefits from knowledge spillovers. The empirical analysis in this paper shows that what type of intermediate goods and capital equipments a country imports and from where it imports indeed matters for its long-run growth. Using highly disaggregated trade data for a large number of countries, we construct an index (denoted asÂ IMPY)Â thatÂ measuresÂ theÂ productivityÂ levelÂ associatedÂ withÂ aÂ countryâ€™sÂ imports. UsingÂ instrumental variable method (to address the endogeneity problems), we find that a higher initial value of the IMPY index (for the year 1995) leads to a faster growth rate of income per capita in the subsequent years (during 1995â€“2005) and vice versa. The results imply that a 10% increase in IMPY increases growth by about 1.3 to 1.9 percentage points, which is quite large.
Download InfoIf you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
Bibliographic InfoPaper provided by eSocialSciences in its series Working Papers with number id:1968.
Date of creation: May 2009
Date of revision:
Note: Institutional Papers
Contact details of provider:
Web page: http://www.esocialsciences.org
Knowledge; Accumulation; Spillovers; Higher; Productivity; Imports; Intermediate and Capital Goods; Economic Growth; Productivity;
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.:
- Acemoglu, D. & Zilibotti, F., 1998.
"Information Accumulation in Development,"
652, Stockholm - International Economic Studies.
- Hausmann, Ricardo & Rodrik, Dani, 2003.
"Economic development as self-discovery,"
Journal of Development Economics,
Elsevier, vol. 72(2), pages 603-633, December.
- Ricardo Hausmann & Dani Rodrik, 2002. "Economic Development as Self-Discovery," NBER Working Papers 8952, National Bureau of Economic Research, Inc.
- Hausmann, Ricardo & Rodrik, Dani, 2002. "Economic Development as Self-Discovery," Working Paper Series rwp02-023, Harvard University, John F. Kennedy School of Government.
- Hausmann, Ricardo & Rodrik, Dani, 2002. "Economic Development as Self Discovery," CEPR Discussion Papers 3356, C.E.P.R. Discussion Papers.
- Kevin M. Murphy & Andrei Shleifer, 1991.
"Quality and Trade,"
NBER Working Papers
3622, National Bureau of Economic Research, Inc.
- Kevin M.Shleifer Murphy & Andrei, 1991. "Quality and Trade," University of Chicago - George G. Stigler Center for Study of Economy and State 66, Chicago - Center for Study of Economy and State.
- James E. Rauch, 1996.
"Networks versus Markets in International Trade,"
NBER Working Papers
5617, National Bureau of Economic Research, Inc.
- Leamer, E. & Levingsohn, J., 1994.
"International Trade Theory: The Evidence,"
368, Research Seminar in International Economics, University of Michigan.
- Aghion, Philippe & Howitt, Peter, 1992.
"A Model of Growth through Creative Destruction,"
Econometric Society, vol. 60(2), pages 323-51, March.
- Philippe Aghion & Peter Howitt, 1990. "A Model of Growth Through Creative Destruction," NBER Working Papers 3223, National Bureau of Economic Research, Inc.
- Aghion, P. & Howitt, P., 1989. "A Model Of Growth Through Creative Destruction," UWO Department of Economics Working Papers 8904, University of Western Ontario, Department of Economics.
- Aghion, P. & Howitt, P., 1989. "A Model Of Growth Through Creative Destruction," Working papers 527, Massachusetts Institute of Technology (MIT), Department of Economics.
- Aghion, P. & Howitt, P., 1990. "A Model Of Growth Through Creative Destruction," DELTA Working Papers 90-12, DELTA (Ecole normale supérieure).
- Garbis Iradian, 2007. "Rapid Growth in Transition Economies: Growth-Accounting Approach," IMF Working Papers 07/164, International Monetary Fund.
- Tibor Besedes & Thomas Prusa, 2006. "Ins, outs, and the duration of trade," Canadian Journal of Economics, Canadian Economics Association, vol. 39(1), pages 266-295, February.
- Keller, Wolfgang, 2002.
"International Technology Diffusion,"
CEPR Discussion Papers
3133, C.E.P.R. Discussion Papers.
- Chuang, Yih-Chyi, 1998. "Learning by Doing, the Technology Gap, and Growth," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 39(3), pages 697-721, August.
- Christian Broda & Joshua Greenfield & David Weinstein, 2006. "From Groundnuts to Globalization: A Structural Estimate of Trade and Growth," NBER Working Papers 12512, National Bureau of Economic Research, Inc.
- Keller, Wolfgang, 1997.
"How trade patterns and technology flows affect productivity growth,"
Policy Research Working Paper Series
1831, The World Bank.
- Keller, Wolfgang, 2000. "Do Trade Patterns and Technology Flows Affect Productivity Growth?," World Bank Economic Review, World Bank Group, vol. 14(1), pages 17-47, January.
- Wolfgang Keller, 1999. "How Trade Patterns and Technology Flows Affect Productivity Growth," NBER Working Papers 6990, National Bureau of Economic Research, Inc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Padma Prakash).
If references are entirely missing, you can add them using this form.