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Product variety and technical change

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  • Richard Frensch

    ()
    (Osteuropa-Institut, Regensburg (Institut for East European Studies))

  • Vitalija Gaucaite-Wittich

Abstract

Several trade-based measures of product variety have recently been used implicitly to represent states of technology, promoting long-run growth. In this paper, we define the state of technology as the range of specialised production processes and propose the variety of capital goods available for production as a direct measure of technology. Within a simple growth framework, we derive a testable “conditional technological convergence” hypothesis on this measure. The hypothesis is tested with highly disaggregated trade data by economic categories, using tools from the income convergence literature. The results suggest that trade-based count measures of the variety of available capital goods indeed behave “as if” they were representing technology and that there is conditional technological convergence among our panel of mainly OECD and transition economies.

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Paper provided by Institut für Ost- und Südosteuropaforschung (Institute for East and South-East European Studies) in its series Working Papers with number 265.

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Length: 42
Date of creation: Nov 2006
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Handle: RePEc:ost:wpaper:265

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Keywords: Product variety; diffusion; adoption; technical change;

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Citations

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Cited by:
  1. A. Minniti & F. Venturini, 2014. "R&D Policy and Schumpeterian Growth: Theory and Evidence," Working Papers wp945, Dipartimento Scienze Economiche, Universita' di Bologna.
  2. Jakob B. Madsen & Shishir Saxena & James B. Ang, 2008. "The Indian Growth Miracle And Endogenous Growth," CAMA Working Papers 2008-29, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
  3. Van Hove, Jan, 2009. "Variety and Quality in Intra-European Manufacturing Trade: The Impact of Innovation and Technological Spillovers," Working Papers 2009/43, Hogeschool-Universiteit Brussel, Faculteit Economie en Management.
  4. Pavla Nikolovova, 2012. "The Impact of FDI on the Host Economy," CERGE-EI Working Papers wp471, The Center for Economic Research and Graduate Education - Economic Institute, Prague.
  5. Francesco Venturini, 2011. "Looking into the black box of Schumpeterian Growth Theories: an empirical assessment of R&D races," Quaderni del Dipartimento di Economia, Finanza e Statistica 94/2011, Università di Perugia, Dipartimento Economia, Finanza e Statistica.
  6. Richard Frensch & Jan Hanousek & Evžen Kocenda, 2012. "Incomplete specialization and offshoring across Europe," FIW Working Paper series 091, FIW.
  7. Katharina Eck, 2010. "(Wie) Führt Außenhandel zu Wirtschaftswachstum?," Working Papers 284, Institut für Ost- und Südosteuropaforschung (Institute for East and South-East European Studies).
  8. Jan Hanousek & Evžen Kočenda, 2013. "Factors of trade in Europe," Working Papers 333, Institut für Ost- und Südosteuropaforschung (Institute for East and South-East European Studies).
  9. Goran Petrevski & Jane Bogoev & Bruno S. Sergi, 2012. "The link between central bank independence and inflation in Central and Eastern Europe: are the results sensitive to endogeneity issue omitted dynamics and subjectivity bias?," Journal of Post Keynesian Economics, M.E. Sharpe, Inc., vol. 34(4), pages 611-652, July.
  10. Richard Frensch & Jan Hanousek & Evžen Kočenda, 2013. "Incomplete Specialization and Trade in Parts and Components," William Davidson Institute Working Papers Series wp1044, William Davidson Institute at the University of Michigan.
  11. Lee, Jim, 2011. "Export specialization and economic growth around the world," Economic Systems, Elsevier, vol. 35(1), pages 45-63, March.
  12. Pavla NIKOLOVOVÁ, 2013. "Sourcing Patterns of FDI Activity and Their Impact on the Domestic Economy," Czech Journal of Economics and Finance (Finance a uver), Charles University Prague, Faculty of Social Sciences, vol. 63(3), pages 288-302, July.
  13. Richard Frensch & Achim Schmillen, 2010. "Can we identify Balassa-Samuelson effects with measures of product variety?," Working Papers 288, Institut für Ost- und Südosteuropaforschung (Institute for East and South-East European Studies).
  14. Richard Frensch, 2008. "Trade liberalisation, adoption costs, and import margins in CEEC and OECD trade," Working Papers 269, Institut für Ost- und Südosteuropaforschung (Institute for East and South-East European Studies).

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