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Can trade really hurt? An empirical follow-up on Samuelson's controversial paper

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Author Info

  • Jürgen Bitzer
  • Holger Görg
  • Philipp Schröder

Abstract

This paper investigates Samuelson's (JEP, 2004) argument that technical progress of the trade partner may hurt the home country. We illustrate this prospect in a simple Ricardian model for sitations with outward knowledge spillovers. Within this framework Samuelson's "Act II" effects may occur. Based on industry level panel data for seventeen OECD countries for the period 1973 to 2000 we show econometrically that the outflow of domestic knowledge via exports or FDI may have a negative impact on industry output in the home country. This is particularly so when exporting to technological less advanced oountries and, more specifically, China

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File URL: http://www.ifw-members.ifw-kiel.de/publications/can-trade-really-hurt-an-empirical-follow-up-on-samuelson-s-controversial-paper-1/KWP_1451_Can_Trade_Really_Hurt.pdf
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Bibliographic Info

Paper provided by Kiel Institute for the World Economy in its series Kiel Working Papers with number 1451.

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Length: 35 pages
Date of creation: Sep 2008
Date of revision:
Handle: RePEc:kie:kieliw:1451

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Keywords: international R&D spillovers; outward foreign direct investment; export driven spillovers;

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References

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  1. Keller, Wolfgang, 2002. "International Technology Diffusion," CEPR Discussion Papers 3133, C.E.P.R. Discussion Papers.
  2. Chiara Criscuolo & Ralf Martin, 2005. "Multinationals and US Productivity Leadership: Evidence from Great Britain," CEP Discussion Papers dp0672, Centre for Economic Performance, LSE.
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  8. J Bradford Jensen & Andrew B Bernard, 2001. "Why Some Firms Export," Working Papers 01-05, Center for Economic Studies, U.S. Census Bureau.
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  18. James Levinsohn & Amil Petrin, 2003. "Estimating Production Functions Using Inputs to Control for Unobservables," Review of Economic Studies, Wiley Blackwell, vol. 70(2), pages 317-341, 04.
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Cited by:
  1. Julian di Giovanni & Andrei A. Levchenko & Jing Zhang, 2013. "The global welfare impact of China: trade integration and technological change," Working Paper Series WP-2013-08, Federal Reserve Bank of Chicago.
  2. Jing Zhang, 2013. "Global Welfare Impact of China: Trade Integration and Technology Change," 2013 Meeting Papers 630, Society for Economic Dynamics.

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