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North-South Technology Diffusion, Regional Integration, and the Dynamics of the "Natural Trading Partners" Hypothesis

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Author Info
Schiff, Maurice () (World Bank and IZA Bonn)
Wang, Yanling (Carleton University)

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Abstract

Based 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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Publisher Info
Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 1384.

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Length: 24 pages
Date of creation: Nov 2004
Date of revision:
Handle: RePEc:iza:izadps:dp1384

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Related research
Keywords: North-South technology diffusion; productivity; regional integration; natural trading partners; Korea; Mexico; Poland;

Other versions of this item:

Find related papers by JEL classification:
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 - - - Other

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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.:
  1. Michaely, Michael, 1998. "Partners to a preferential trade agreement: Implications of varying size," Journal of International Economics, Elsevier, vol. 46(1), pages 73-85, October. [Downloadable!] (restricted)
  2. Lichtenberg, Frank R. & Pottelsberghe de la Potterie, Bruno v., 1998. "International R&D spillovers: A comment," European Economic Review, Elsevier, vol. 42(8), pages 1483-1491, September. [Downloadable!] (restricted)
  3. Lumenga-Neso, Olivier & Olarreaga, Marcelo & Schiff, Maurice, 2001. "On 'Indirect' Trade-Related R&D Spillovers," CEPR Discussion Papers 2871, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
    Other versions:
  4. Eaton, Jonathan & Kortum, Samuel, 1999. "International Technology Diffusion: Theory and Measurement," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 40(3), pages 537-70, August.
  5. Lawrence H. Summers, 1991. "Regionalism and the world trading system," Proceedings, Federal Reserve Bank of Kansas City, pages 295-301.
  6. Schiff, Maurice & Wang, Yanling & Olarreaga, Marcelo, 2002. "Trade-related technology diffusion and the dynamics of North-South and South-South integration," Policy Research Working Paper Series 2861, The World Bank. [Downloadable!]
  7. Schiff, Maurice, 1999. "Will the real"natural trading partner"please stand up?," Policy Research Working Paper Series 2161, The World Bank. [Downloadable!]
  8. Keller, Wolfgang, 1998. "Are international R&D spillovers trade-related?: Analyzing spillovers among randomly matched trade partners," European Economic Review, Elsevier, vol. 42(8), pages 1469-1481, September. [Downloadable!] (restricted)
    Other versions:
  9. Coe, David T. & Helpman, Elhanan, 1995. "International R&D spillovers," European Economic Review, Elsevier, vol. 39(5), pages 859-887, May. [Downloadable!] (restricted)
    Other versions:
  10. Pravin Krishna, 2003. "Are Regional Trading Partners "Natural"?," Journal of Political Economy, University of Chicago Press, vol. 111(1), pages 202-231, February. [Downloadable!] (restricted)
  11. Panagariya, A., 1997. "Preferential trading and the myth of natural trading partners," Japan and the World Economy, Elsevier, vol. 9(4), pages 471-489, December. [Downloadable!] (restricted)
  12. David T. Coe & Alexander W. Hoffmaister, 1999. "Are There International R&D Spillovers Among Randomly Matched Trade Partners?- A Response to Keller," IMF Working Papers 99/18, International Monetary Fund.
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