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How does trade-mediated technology transfer affect interregional and intersectoral competition? Exploring multi-sectoral effects in a global trade model

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  • Das, Gouranga

Abstract

In 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 Info

Paper provided by University Library of Munich, Germany in its series MPRA Paper with number 37256.

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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
Handle: RePEc:pra:mprapa:37256

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Keywords: Absorptive capacity; capture parameter; trade; technology; Armington; TFP (total factor productivity);

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  1. Gouranga Gopal Das & Alan A. Powell, 2000. "Absorption Capacity, Structural Similarity and Embodied Technology Spillovers in a 'Macro' Model: An Implementation Within the GTAP Framework," Centre of Policy Studies/IMPACT Centre Working Papers ip-77, Victoria University, Centre of Policy Studies/IMPACT Centre.
  2. Coe, David T & Helpman, Elhanan & Hoffmaister, Alexander, 1995. "North-South R&D Spillovers," CEPR Discussion Papers 1133, C.E.P.R. Discussion Papers.
  3. Cohen, Wesley M & Levinthal, Daniel A, 1989. "Innovation and Learning: The Two Faces of R&D," Economic Journal, Royal Economic Society, vol. 99(397), pages 569-96, September.
  4. Stephen Kosempel, 2007. "Interaction between knowledge and technology: a contribution to the theory of development," Canadian Journal of Economics, Canadian Economics Association, vol. 40(4), pages 1237-1260, November.
  5. Hans Meijl & Frank Tongeren, 1998. "Trade, technology spillovers, and food production in China," Review of World Economics (Weltwirtschaftliches Archiv), Springer, vol. 134(3), pages 423-449, September.
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