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Why Doesn't Technology Flow from Rich to Poor Countries?

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Author Info

  • Juan Sanchez

    (Federal Reserve Bank of St. Louis)

  • Jeremy Greenwood

    (University of Pennsylvania)

  • Harold Cole

    (University of Pennsylvania)

Abstract

What determines the choice of technology within a country? While there could be many factors, the efficiency of the country's financial system may play a significant role. To address this question, a dynamic contract model is embedded into a general equilibrium setting with ompetitive intermediation. The ability of an intermediary to monitor and control the cash flows of a firm plays an important role in the decision to underwrite technology adoption. Can such a theory help to explain the differences in TFP and establishment-size distributions between India, Mexico and the U.S.? Some applied analysis suggests that answer is yes.

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Bibliographic Info

Paper provided by Society for Economic Dynamics in its series 2012 Meeting Papers with number 834.

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Date of creation: 2012
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Handle: RePEc:red:sed012:834

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References

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  1. Yongseok Shin & Joe Kaboski & Francisco J. Buera, 2008. "Finance and Development: A Tale of Two Sectors," 2008 Meeting Papers 955, Society for Economic Dynamics.
  2. Rui Castro & Gian Luca Clementi & Glenn MacDonald, 2004. "Investor Protection, Optimal Incentives, and Economic Growth," The Quarterly Journal of Economics, MIT Press, vol. 119(3), pages 1131-1175, August.
  3. Jeremy Greenwood & Juan M. Sánchez & Cheng Wang, 2010. "Financing development: the role of information costs," Working Papers 2010-024, Federal Reserve Bank of St. Louis.
  4. James Tybout, 1998. "Manufacturing Firms In Developing Countries: How Well Do They Do, And Why?," Development and Comp Systems 9805004, EconWPA.
  5. Lucas, Robert E, Jr, 1990. "Why Doesn't Capital Flow from Rich to Poor Countries?," American Economic Review, American Economic Association, vol. 80(2), pages 92-96, May.
  6. Kenichi Ueda & Robert M. Townsend, 2007. "Welfare Gains from Financial Liberalization," IMF Working Papers 07/154, International Monetary Fund.
  7. Jeremy Greenwood & Juan Sanchez & Cheng Wang, 2013. "Quantifying the Impact of Financial Development on Economic Development," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 16(1), pages 194-215, January.
  8. Edward C. Prescott, 1997. "Needed: a theory of total factor productivity," Staff Report 242, Federal Reserve Bank of Minneapolis.
  9. Fernandes, Ana & Phelan, Christopher, 2000. "A Recursive Formulation for Repeated Agency with History Dependence," Journal of Economic Theory, Elsevier, vol. 91(2), pages 223-247, April.
  10. Todd Schoellman, 2012. "Education Quality and Development Accounting," Review of Economic Studies, Oxford University Press, vol. 79(1), pages 388-417.
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Blog mentions

As found by EconAcademics.org, the blog aggregator for Economics research:
  1. The missing North-South flow of technology
    by Economic Logician in Economic Logic on 2012-11-09 15:50:00
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Cited by:
  1. Juan M. Sanchez & Cheng Wang & Jeremy Greenwood, 2011. "Quantifying the Impact of Financial Development on Economic Development," 2011 Meeting Papers 240, Society for Economic Dynamics.
  2. Diego Restuccia & Richard Rogerson, 2012. "Misallocation and Productivity," Working Papers tecipa-468, University of Toronto, Department of Economics.
  3. Hsieh, Chang-Tai & Klenow, Peter J., 2012. "The Life Cycle of Plants in India and Mexico," Working Papers 12-20, Center for Economic Studies, U.S. Census Bureau.

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