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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)

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

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Date of creation: Mar 2008
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Handle: RePEc:iza:izadps:dp3383

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

Find related papers by JEL classification:
F10 - International Economics - - Trade - - - General
F15 - International Economics - - Trade - - - Economic Integration
O19 - Economic Development, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations
O24 - Economic Development, Technological Change, and Growth - - Development Planning and Policy - - - Trade Policy; Factor Movement; Foreign Exchange Policy
O33 - Economic Development, Technological Change, and Growth - - Technological Change - - - Technological Change: Choices and Consequences; Diffusion Processes

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References listed on IDEAS
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  1. Rodolfo Manuelli & Ananth Seshadri, 2003. "Frictionless Technology Diffusion: The Case of Tractors," NBER Working Papers 9604, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  2. 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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  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)
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  4. 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!]
  5. Jeremy Greenwood, 1999. "The Third Industrial Revolution," Economic Review, Federal Reserve Bank of Cleveland, issue Q II, pages 2-12. [Downloadable!]
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  6. 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:
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