How does trade-mediated technology transfer affect interregional and intersectoral competition? Exploring multi-sectoral effects in a global trade model
AbstractIn this paper, all technology transfers are embodied in trade flows within a three-region, six-tradedcommodity version of the GTAP model. 4% Hicks-Neutral technical progress in heavy manufacturing in one region has uneven impacts on productivity elsewhere. Why? Destination regions’ ability to harness new technology depends on their absorptive capacity and on the structural congruence of the source and destination. Together with trade volume, these two factors determine the recipient’s success in capturing foreign technology. Sectors, intensive in heavy manufacturing, register higher productivity growth. Inter-regional competition coupled with changes in price relativities, loom large in general equilibrium adjustment. Hicks-neutrality of the TFP (total factor productivity) improvement implies that, at the initial configuration of inputs, the marginal products of land, labour, and capital, change by the same proportion in any region. However, for the experiment conducted, productivity changes and the spillover coefficients dominate the variable impact across sectors and regions.
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Bibliographic InfoPaper provided by University Library of Munich, Germany in its series MPRA Paper with number 37256.
Date of creation: 01 Nov 2009
Date of revision: 01 Jun 2010
Publication status: Published in African Journal of Business Management 14.5(2011): pp. 5871-5886
Absorptive capacity; capture parameter; trade; technology; Armington; TFP (total factor productivity);
Find related papers by JEL classification:
- C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
- F17 - International Economics - - Trade - - - Trade Forecasting and Simulation
- O33 - Economic Development, Technological Change, and Growth - - Technological Change; Research and Development; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
- O4 - Economic Development, Technological Change, and Growth - - Economic Growth and Aggregate Productivity
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