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North-South Technology Spillovers: The Relative Impact of Openness and Foreign R&D

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Author Info

  • Schiff, Maurice

    ()
    (World Bank)

  • Wang, Yanling

    ()
    (Carleton University)

Abstract

This paper examines the relative contribution of openness and the R&D content of trade to TFP growth for North-South trade-related technology diffusion. The measure of foreign R&D used in the literature on trade-related technology diffusion imposes identical contributions of openness and the R&D content of trade to TFP. We allow these contributions to differ and show that openness has a greater impact on TFP growth than R&D. These results imply that the impact of openness on TFP in developing countries is larger than previously obtained in this literature. In other words, developing countries can obtain larger productivity gains from trade liberalization than previously thought.

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Bibliographic Info

Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 3383.

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Length: 17 pages
Date of creation: Mar 2008
Date of revision:
Publication status: published in International Economic Journal, 2010, 24 (2), 159-69
Handle: RePEc:iza:izadps:dp3383

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Keywords: openness; R&D; technology diffusion; North-South;

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  1. Jeremy Greenwood, 2009. "The Third Industrial Revolution," Books, American Enterprise Institute, number 24218, 4.
  2. Greenaway, David & Foster, Neil, 2002. "North-South Trade, Knowledge Spillovers and Growth," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 17, pages 650-670.
  3. Lumenga-Neso, Olivier & Olarreaga, Marcelo & Schiff, Maurice, 2005. "On `indirect' trade-related R&D spillovers," European Economic Review, Elsevier, vol. 49(7), pages 1785-1798, October.
  4. Coe, D.T. & Helpman, E., 1993. "International R&D Spillovers," Papers 5-93, Tel Aviv.
  5. Rodolfo Manuelli & Ananth Seshadri, 2003. "Frictionless technology diffusion: the case of tractors," Proceedings, Federal Reserve Bank of San Francisco, issue Nov.
  6. Coe, David T & Helpman, Elhanan & Hoffmaister, Alexander W, 1997. "North-South R&D Spillovers," Economic Journal, Royal Economic Society, vol. 107(440), pages 134-49, January.
  7. 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.
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