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Technology Trade in Economic Development

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  • Matthias Busse

    ()
    (Hamburg Institue of International Economics (HWWA))

  • José Luis Groizard

    ()
    (Universitat de les Illes Balears)

Abstract

Recent evidence on the respective contributions of institutions and trade to income levels across countries has demonstrated that – once endogeneity is considered – institutional quality clearly dominates the effect of trade. We argue that overall trade is not the most appropriate measure for technology diffusion as a source of productivity growth and propose to focus on imports of research and development (R&D) intensive goods instead. Overall, we confirm previous findings that institutions matter most and that overall trade is not positively associated with per-capita income levels. Yet this does not hold for technology trade, as there is a positive and significant linkage between technology imports and income levels. This outcome is robust to various model specifications, including an instrumental variable approach.

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Bibliographic Info

Paper provided by Universitat de les Illes Balears, Departament d'Economía Aplicada in its series DEA Working Papers with number 22.

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Date of creation: 2006
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Handle: RePEc:ubi:deawps:22

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Keywords: Growth; Technology Diffusion; Trade; R&D Spillovers.;

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Citations

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Cited by:
  1. Mellati, Ali, 2008. "Technology, Trade Specialization and Development: Jumping to Technology Development Era," MPRA Paper 26643, University Library of Munich, Germany.
  2. Andrea Fracasso & Giuseppe Vittucci Marzetti, 2013. "An empirical note on international R&D spillovers," Empirical Economics, Springer, vol. 45(1), pages 179-191, August.
  3. Jose Groizard, 2009. "Technology Trade," Journal of Development Studies, Taylor & Francis Journals, vol. 45(9), pages 1526-1544.
  4. Krammer, Sorin, 2013. "Assessing the relative importance of multiple channels for embodied and disembodied technological spillovers," MPRA Paper 53676, University Library of Munich, Germany.
  5. Herrerias, M.J. & Orts, Vicente, 2013. "Capital goods imports and long-run growth: Is the Chinese experience relevant to developing countries?," Journal of Policy Modeling, Elsevier, vol. 35(5), pages 781-797.

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