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On the quantity and quality of knowledge - the impact of openness and foreign research and development on North-North and North-South technology spillovers

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Author Info
Schiff, Maurice
Wang, Yanling

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Abstract

Knowledge accumulation means either new knowledge (an increase in its quality), greater access to existing knowledge (an increase in its quantity), or both. The authors examine the relative contribution of these two components of knowledge to total factor productivity (TFP) for North-North and North-South trade-related knowledge diffusion, with quantity, proxied by openness, and quality by the research and development (R&D) content of trade. The measure of foreign R&D used in the literature on trade-related knowledge diffusion, imposes equal contributions to TFP of openness, and of R&D content of trade. The authors'analysis show that R&D has a greater impact on TFP, than openness for North-North trade and, conversely, openness has a greater impact on TFP, than R&D for North-South trade. These results imply that the impact of openness on TFP in developing (industrial) countries is larger (smaller) than previously obtained in this literature, and that developing countries can obtain larger productivity gains from trade liberalization than previously thought.

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Paper provided by The World Bank in its series Policy Research Working Paper Series with number 3190.

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Date of creation: 01 Jan 2004
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Handle: RePEc:wbk:wbrwps:3190

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Keywords: Scientific Research&Science Parks; Agricultural Knowledge&Information Systems; Economic Theory&Research; Environmental Economics&Policies; Public Health Promotion; Environmental Economics&Policies; Agricultural Knowledge&Information Systems; TF054105-DONOR FUNDED OPERATION ADMINISTRATION FEE INCOME AND EXPENSE ACCOUNT; Economic Theory&Research; Research and Development;

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  1. Coe, David T. & Helpman, Elhanan, 1995. "International R&D spillovers," European Economic Review, Elsevier, vol. 39(5), pages 859-887, May. [Downloadable!] (restricted)
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  2. David Greenaway & Neil Foster & Rod Falvey, 2002. "North-South Trade, Knowledge Spillovers and Growth," European Economy Group Working Papers 15, European Economy Group. [Downloadable!]
  3. Andrew Atkeson & Patrick J. Kehoe, 2001. "The Transition to a New Economy After the Second Industrial Revolution," NBER Working Papers 8676, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  4. Boyan Jovanovic & Glenn MacDonald, 1994. "Competitive Diffusion," NBER Working Papers 4463, National Bureau of Economic Research, Inc. [Downloadable!] (restricted)
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  5. Jovanovic, B. & Nyarko, Y., 1996. "Learning by Doing and the Choice of Technology," Working Papers 96-25, C.V. Starr Center for Applied Economics, New York University. [Downloadable!]
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  6. Lichtenberg, Frank R. & Pottelsberghe de la Potterie, Bruno v., 1998. "International R&D spillovers: A comment," European Economic Review, Elsevier, vol. 42(8), pages 1483-1491, September. [Downloadable!] (restricted)
  7. Keller, Wolfgang, 2000. "Do Trade Patterns and Technology Flows Affect Productivity Growth?," World Bank Economic Review, Oxford University Press, vol. 14(1), pages 17-47, January.
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  8. Keller, Wolfgang, 1998. "Are international R&D spillovers trade-related?: Analyzing spillovers among randomly matched trade partners," European Economic Review, Elsevier, vol. 42(8), pages 1469-1481, September. [Downloadable!] (restricted)
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  9. Jeremy Greenwood, 1999. "The Third Industrial Revolution," Economic Review, Federal Reserve Bank of Cleveland, issue Q II, pages 2-12. [Downloadable!]
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  10. Wolfgang Keller, 2002. "Geographic Localization of International Technology Diffusion," American Economic Review, American Economic Association, vol. 92(1), pages 120-142, March. [Downloadable!]
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  11. Coe, David T & Helpman, Elhanan & Hoffmaister, Alexander W, 1997. "North-South R&D Spillovers," Economic Journal, Royal Economic Society, vol. 107(440), pages 134-49, January. [Downloadable!] (restricted)
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  12. Keller, Wolfgang, 2002. " Trade and the Transmission of Technology," Journal of Economic Growth, Springer, vol. 7(1), pages 5-24, March. [Downloadable!] (restricted)
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