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The dual nature of trade: measuring its impact on imitation and growth

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Author Info
Michelle P. Connolly
Abstract

Imports of goods that embody foreign technology raise a country's output directly as inputs into production and indirectly through reverse-engineering of these goods, which contributes to domestic imitation and innovation. This paper first quantifies spillovers from high-technology imports from developed countries to domestic imitation and innovation in both developed and developing countries. It then considers the contribution of foreign and domestic innovation to real per capita GDP growth. ; International patent data for forty countries from 1970 to 1985 are used to create proxies for imitation and innovation. High-technology imports, as well as quality-adjusted research and the size of the economy, positively affect both domestic imitation and innovation. Transportation and communication infrastructure positively affects imitation, but does not appear to play a role in innovation. Interestingly, foreign direct investment, often considered an important mechanism for technological diffusion to developing nations, does not significantly affect either domestic innovation or imitation. Finally, while both foreign and domestic innovation contribute positively to real per capita GDP growth, foreign technology from developed countries appears to play a far greater role in growth than domestic technology.

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Paper provided by Federal Reserve Bank of New York in its series Staff Reports with number 44.

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Date of creation: 1998
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Handle: RePEc:fip:fednsr:44

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Keywords: Imports ; Technology;

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This paper has been announced in the following NEP Reports: References listed on IDEAS
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  4. Jeffrey D. Sachs & Andrew Warner, 1995. "Economic Reform and the Process of Global Integration," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, vol. 26(1995-1), pages 1-118. [Downloadable!]
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  6. Maskus, Keith E. & Penubarti, Mohan, 1995. "How trade-related are intellectual property rights?," Journal of International Economics, Elsevier, vol. 39(3-4), pages 227-248, November. [Downloadable!] (restricted)
  7. 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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  8. Mansfield, Edwin & Schwartz, Mark & Wagner, Samuel, 1981. "Imitation Costs and Patents: An Empirical Study," Economic Journal, Royal Economic Society, vol. 91(364), pages 907-18, December. [Downloadable!] (restricted)
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  10. Ben-David, Dan, 1996. "Trade and convergence among countries," Journal of International Economics, Elsevier, vol. 40(3-4), pages 279-298, May. [Downloadable!] (restricted)
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  11. Jong-Wha Lee, 1992. "International Trade, Distortions and Long-Run Economic Growth," IMF Working Papers 92/90, International Monetary Fund.
  12. Richard R. Nelson & Edmond S. Phelps, 1965. "Investment in Humans, Technological Diffusion and Economic Growth," Cowles Foundation Discussion Papers 189, Cowles Foundation, Yale University. [Downloadable!]
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  14. 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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  15. Coe, David T. & Helpman, Elhanan, 1995. "International R&D spillovers," European Economic Review, Elsevier, vol. 39(5), pages 859-887, May. [Downloadable!] (restricted)
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  16. Ben-David, Dan, 1996. "Technological Convergence and International Trade," CEPR Discussion Papers 1359, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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  17. Aghion, Philippe & Howitt, Peter, 1992. "A Model of Growth through Creative Destruction," Econometrica, Econometric Society, vol. 60(2), pages 323-51, March. [Downloadable!] (restricted)
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  18. Jeffrey Sachs & Andrew Warner, 1995. "Economic Reform and the Progress of Global Integration," Harvard Institute of Economic Research Working Papers 1733, Harvard - Institute of Economic Research.
  19. Haddad, Mona & Harrison, Ann, 1993. "Are there positive spillovers from direct foreign investment? : Evidence from panel data for Morocco," Journal of Development Economics, Elsevier, vol. 42(1), pages 51-74, October. [Downloadable!] (restricted)
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(explanations, 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.)

  1. Wolfgang Keller, 2001. "International Technology Diffusion," NBER Working Papers 8573, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  2. Roe, Terry & Mohtadi, Hamid, 1999. "International Trade And Growth: An Overview From The Perspective Of The New Growth Theory," 1999 Annual meeting, August 8-11, Nashville, TN 21536, American Agricultural Economics Association (New Name 2008: Agricultural and Applied Economics Association). [Downloadable!]
  3. Roberto A. De Santis, 2002. "Intra-Industry Trade, Endogenous Technological Change, Wage Inequality And Welfare," International Economic Journal, Korean International Economic Association, vol. 16(3), pages 59-79, October. [Downloadable!] (restricted)
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  4. Nicholas Apergis & Claire Economidou & Ioannis Filippidis, 2008. "Innovation, Technology Transfer and Labor Productivity Linkages: Evidence from a Panel of Manufacturing Industries," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 144(3), pages 491-508, October. [Downloadable!] (restricted)
    Other versions:
  5. Erzan, Refik & Filiztekin, Alpay & Zenginobuz, Unal, 2002. "Turkey’s Customs Union with the European Union: A Framework for Evaluating the Impact of Economic Integration," MPRA Paper 382, University Library of Munich, Germany. [Downloadable!]
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