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Technological Adaptation, Trade, and Growth

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  • Alberto Chong
  • L. Zanforlin

Abstract

This paper extends Grossman and Helpman’s seminal work (1991), and presents an endogenous growth model where innovations created in a high-tech sector may be assimilated or adapted by a low-tech sector. Applying a simple Heckscher-Ohlin framework, the effects of technological diffusion are found to allow a country relatively scarce in human capital to benefit from nondecreasing rates of growth through its low-tech sector. The model is tested by using a dynamic panel data approach (Arellano and Bover, 1995). Results are consistent with the predictions of the model and robust to a broad range of definitions of technological intensity.

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Bibliographic Info

Paper provided by International Monetary Fund in its series IMF Working Papers with number 00/161.

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Length: 31
Date of creation: 01 Oct 2000
Date of revision:
Handle: RePEc:imf:imfwpa:00/161

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Keywords: Trade; Economic growth; intermediate inputs; correlation; international trade; statistics; unskilled labor; endogenous growth; prediction; political economy; output growth; equation; equations; open economy; skilled labor; covariance; statistic; trade classification; consistent estimate; closed economy; endogenous growth theory; trade flows; impact of trade; predictions; factor endowments; causation; export growth; trade flow; empirical estimation; optimization; rate of innovation; global trade; outlier; asymptotic distribution; net exporter; pattern of specialization; intellectual property rights; factor markets; foreign trade; multinational enterprises; dynamic effects; rate of change; intermediate goods; intellectual property; transport equipment; dynamic models; trade liberalization; fixed capital costs; instrumental variables; factor price equalization; econometrics; free entry; instrumental variable; pattern of trade; time series; export orientation; terms of trade; empirical specification; market entry; skilled workers; coefficient vector; open economies; economic integration; patterns of trade; factor price; nominal interest rate; trade policies;

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References

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  1. Dani Rodrik, 1993. "Trade and Industrial Policy Reform in Developing Countries: A Review of Recent Theory and Evidence," NBER Working Papers 4417, National Bureau of Economic Research, Inc.
  2. J. Bradford De Long & Lawrence H. Summers, . "Equipment Investment and Economic Growth," J. Bradford De Long's Working Papers, University of California at Berkeley, Economics Department _122, University of California at Berkeley, Economics Department.
  3. Barro, Robert J. & Lee, Jong-Wha, 1993. "International comparisons of educational attainment," Journal of Monetary Economics, Elsevier, Elsevier, vol. 32(3), pages 363-394, December.
  4. Blundell, Richard & Bond, Stephen, 1998. "Initial conditions and moment restrictions in dynamic panel data models," Journal of Econometrics, Elsevier, Elsevier, vol. 87(1), pages 115-143, August.
  5. Ventura, Jaume, 1997. "Growth and Interdependence," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 112(1), pages 57-84, February.
  6. Quah, Danny T., 1996. "Empirics for economic growth and convergence," European Economic Review, Elsevier, Elsevier, vol. 40(6), pages 1353-1375, June.
  7. Ethier, Wilfred J, 1982. "National and International Returns to Scale in the Modern Theory of International Trade," American Economic Review, American Economic Association, American Economic Association, vol. 72(3), pages 389-405, June.
  8. Norman Loayza & Klaus Schmidt-Hebbel & Luis Servén, 1999. "What Drives Private Saving Across the World?," Working Papers Central Bank of Chile, Central Bank of Chile 47, Central Bank of Chile.
  9. David H. Romer & Jeffrey A. Frankel, 1999. "Does Trade Cause Growth?," American Economic Review, American Economic Association, American Economic Association, vol. 89(3), pages 379-399, June.
  10. Ann Harrison, 1995. "Openness and Growth: A Time-Series, Cross-Country Analysis for Developing Countries," NBER Working Papers 5221, National Bureau of Economic Research, Inc.
  11. Michaely, Michael, 1977. "Exports and growth : An empirical investigation," Journal of Development Economics, Elsevier, Elsevier, vol. 4(1), pages 49-53, February.
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Cited by:
  1. Allan D. Brunner, 2003. "The Long-Run Effects of Tradeon Income and Income Growth," IMF Working Papers 03/37, International Monetary Fund.
  2. Alberto Chong, 2001. "Desigualdad, democracia y persistencia: ¿existe una curva Kuznets política?," Research Department Publications, Inter-American Development Bank, Research Department 4254, Inter-American Development Bank, Research Department.
  3. Alberto Chong, 2001. "Inequality, Democracy, and Persistence: Is There a Political Kuznets Curve?," Research Department Publications, Inter-American Development Bank, Research Department 4253, Inter-American Development Bank, Research Department.

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