North-South Technology Diffusion, Regional Integration, and the Dynamics of the “Natural Trading Partners” Hypothesis
AbstractBased on static analysis, a number of studies argue that forming a RTA is more likely to raise welfare if member countries are “natural trading partners,” while other studies claim the opposite. This paper considers the argument from a dynamic viewpoint by examining the impact of trade with Japan, North America and the EU on technology diffusion and TFP in Korea, Mexico and Poland. Using industry-level data, we show that i) technology diffusion and productivity gains tend to be regional: Korea (Mexico) (Poland) benefits mainly from trade with Japan (North America) (the EU); and ii) the dynamic version of the “natural trading partners” hypothesis seems to hold for Korea and Mexico though not necessarily for Poland.
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Bibliographic InfoPaper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 1384.
Length: 24 pages
Date of creation: Nov 2004
Date of revision:
Publication status: published in: Revue d'économie du développement, 2007, 21 (5), 69-84
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Other versions of this item:
- Maurice Schiff & Yanling Wang, 2007. "North-South technology diffusion, regional integration, and the dynamics of the “natural trading partners” hypothesis," Revue d’économie du développement, De Boeck Université, vol. 21(5), pages 69-84.
- Schiff, Maurice & Wang, Yanling, 2004. "North-South technology diffusion, regional integration, and the dynamics of the natural trading partners hypothesis," Policy Research Working Paper Series 3434, The World Bank.
- F02 - International Economics - - General - - - International Economic Order; Noneconomic International Organizations;; Economic Integration and Globalization: General
- F13 - International Economics - - Trade - - - Trade Policy; International Trade Organizations
- F15 - International Economics - - Trade - - - Economic Integration
- F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
- O39 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Other
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