IDEAS home Printed from https://ideas.repec.org/a/bla/reviec/v13y2005i1p1-19.html

Economic Takeoffs in a Dynamic Process of Globalization

Author

Listed:
  • Eric W. Bond
  • Ronald W. Jones
  • Ping Wang

Abstract

The paper develops a dynamic general‐equilibrium framework to illustrate that trade liberalization may speed up the process of globalization and industrialization by enabling a small open economy to reallocate production factors to modern export sectors where increasing returns to experience are present. The authors emphasize the role of knowledge in service activities related to the export of modern sector goods, which has the form of a public good that can be utilized in exporting of other modern sector goods. As a consequence of this knowledge accumulation, the economy begins to take off and exhibits more rapid rates of wage and output growth. The accumulation of knowledge also shifts comparative advantage in the modern sector to more service‐intensive goods, thus leading to a natural evolution of comparative advantage. These results lend theoretical support to the different development experiences in the 1960s between East Asia and Latin America.

Suggested Citation

  • Eric W. Bond & Ronald W. Jones & Ping Wang, 2005. "Economic Takeoffs in a Dynamic Process of Globalization," Review of International Economics, Wiley Blackwell, vol. 13(1), pages 1-19, February.
    • Handle: RePEc:bla:reviec:v:13:y:2005:i:1:p:1-19
    DOI: 10.1111/j.1467-9396.2005.00489.x
    as

    Download full text from publisher

    File URL: https://doi.org/10.1111/j.1467-9396.2005.00489.x
    Download Restriction: no
    File URL: https://libkey.io/10.1111/j.1467-9396.2005.00489.x?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Andrew B. Bernard & J. Bradford Jensen, 1999. "Exporting and Productivity," NBER Working Papers 7135, National Bureau of Economic Research, Inc.
    2. James E. Rauch, 1996. "Trade and Search: Social Capital, Sogo Shosha, and Spillovers," NBER Working Papers 5618, National Bureau of Economic Research, Inc.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Gharsallah, Mariem & Trabelsi, Salwa, 2024. "The effect of human capital on the trade-growth nexus: A dynamic panel threshold analysis," Research in Economics, Elsevier, vol. 78(4).
    2. Imen Mohamed Sghaier, 2023. "Trade openness, financial development and economic growth in North African countries," International Journal of Finance & Economics, John Wiley & Sons, Ltd., vol. 28(2), pages 1729-1740, April.
    3. Shahbaz, Muhammad, 2012. "Does trade openness affect long run growth? Cointegration, causality and forecast error variance decomposition tests for Pakistan," Economic Modelling, Elsevier, vol. 29(6), pages 2325-2339.
    4. Messono Ombolo Omang & Fabrice Assoumou Zambo, 2026. "Effect of Globalization on Economic Vulnerability in 142 Countries," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 17(1), pages 2845-2888, February.
    5. Pam Zahonogo, 2016. "Trade and economic growth in developing countries: Evidence from sub-Saharan Africa," Journal of African Trade, Springer, vol. 3(1), pages 41-56, March.
    6. Hexian Wang & Wei Liu & Mengyuan Zhu & Qing Wang, 2018. "Embrace or Not? An Empirical Study of the Impact of Globalization on the Country’s Sustainability in the Case of NAFTA," Sustainability, MDPI, vol. 10(10), pages 1-16, September.
    7. Yunfang Hu & Takuma Kunieda & Kazuo Nishimura & Ping Wang, 2023. "Flying or trapped?," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 75(2), pages 341-388, February.
    8. Wang, Ping & Xie, Danyang, 2004. "Activation of a modern industry," Journal of Development Economics, Elsevier, vol. 74(2), pages 393-410, August.
    9. My-Linh Thi Nguyen & Toan Ngoc Bui, 2021. "Trade Openness and Economic Growth: A Study on Asean-6," Economies, MDPI, vol. 9(3), pages 1-16, August.
    10. Dong-Hyeon Kim & Shu-Chin Lin, 2009. "Trade and Growth at Different Stages of Economic Development," Journal of Development Studies, Taylor & Francis Journals, vol. 45(8), pages 1211-1224.
    11. Imen Mohamed Sghaier, 2020. "Does Financial Development Affect the Economic Growth Gains from Trade Openness?," Economic Alternatives, University of National and World Economy, Sofia, Bulgaria, issue 4, pages 666-682, December.
    12. Muhammad Tariq Majeed, 2020. "Do digital governments foster economic growth in the developing world? An empirical analysis," Netnomics, Springer, vol. 21(1), pages 1-16, December.
    13. Emilie Kinfack & Lumengo Bonga‐Bonga, 2023. "The growth effect of trade openness on African countries: Evidence from using an instrumental variable panel smooth transition model," Bulletin of Economic Research, Wiley Blackwell, vol. 75(2), pages 366-379, April.
    14. Eric W. Bond & Yan Ma, 2013. "Learning by Doing and Fragmentation," Pacific Economic Review, Wiley Blackwell, vol. 18(5), pages 603-627, December.
    15. Marina V. Vasiljeva & Vadim V. Ponkratov & Larisa A. Vatutina & Maria V. Volkova & Marina I. Ivleva & Elena V. Romanenko & Nikolay V. Kuznetsov & Nadezhda N. Semenova & Elena F. Kireeva & Dmitrii K. G, 2022. "Crude Oil Market Functioning and Sustainable Development Goals: Case of OPEC++-Participating Countries," Sustainability, MDPI, vol. 14(8), pages 1-23, April.
    16. Nicholas Sim, 2005. "Service liberalization, endogenous industrial composition and modernization," Applied Economics Letters, Taylor & Francis Journals, vol. 12(3), pages 161-163.
    17. Ming-Jen Chang & Ping Wang & Danyang Xie, 2016. "The Dynamic Process of Economic Takeoff and Industrial Transformation," Frontiers of Economics in China-Selected Publications from Chinese Universities, Higher Education Press, vol. 11(1), pages 60-87, March.
    18. Jalil Khodaparast Shirazi & Vahid Mohamad Taghvaee & Mohamad Nasiri & Abbas Assari Arani, 2020. "Sustainable development and openness in oil-exporting countries: green growth and brown growth," Journal of Economic Structures, Springer;Pan-Pacific Association of Input-Output Studies (PAPAIOS), vol. 9(1), pages 1-19, December.
    19. Ehsan Rasoulinezhad, 2020. "Energy Trade and Economic Integration between the Commonwealth Independent States and China," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 35(1), pages 172-190.
    20. Trindade, Vitor, 2005. "The big push, industrialization and international trade: The role of exports," Journal of Development Economics, Elsevier, vol. 78(1), pages 22-48, October.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Ferreira, Pedro Cavalcanti & Galvao Jr., Antonio F. & Gomes, Fabio Augusto Reis & Pessoa, Samuel de Abreu, 2010. "The effects of external and internal shocks on total factor productivity," The Quarterly Review of Economics and Finance, Elsevier, vol. 50(3), pages 298-309, August.
    2. Davide Castellani, 2002. "Export behavior and productivity growth: Evidence from Italian manufacturing firms," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 138(4), pages 605-628, December.
    3. Carolyn Evans, 2006. "Border effects and the availability of domestic products abroad," Canadian Journal of Economics, Canadian Economics Association, vol. 39(1), pages 211-246, February.
    4. Hagemejer, Jan, 2007. "Factors driving the firms decision to export. Firm-level evidence from Poland," MPRA Paper 17717, University Library of Munich, Germany.
    5. Salman Haider & Aadil Ahmad Ganaie & Bandi Kamaiah, 2019. "Total Factor Productivity and Openness in Indian Economy: 1970–2011," Foreign Trade Review, , vol. 54(1), pages 46-57, February.
    6. Michael Artis & Toshihiro Okubo, 2008. "The Intranational Business Cycle: Evidence from Japan," Centre for Growth and Business Cycle Research Discussion Paper Series 101, Economics, The University of Manchester.
    7. Sébastien Jean, 2002. "International Trade and Firms' Heterogeneity under Monopolistic Competition," Open Economies Review, Springer, vol. 13(3), pages 291-311, July.
    8. Andersen, Torben M., 2005. "Product market integration, wage dispersion and unemployment," Labour Economics, Elsevier, vol. 12(3), pages 379-406, June.
    9. Andrew B. Bernard & J. Bradford Jensen & Peter K. Schott, 2009. "Importers, Exporters and Multinationals: A Portrait of Firms in the U.S. that Trade Goods," NBER Chapters, in: Producer Dynamics: New Evidence from Micro Data, pages 513-552, National Bureau of Economic Research, Inc.
    10. Jonathan Haskel & Holger Wolf, 2001. "The Law of One Price—A Case Study," Scandinavian Journal of Economics, Wiley Blackwell, vol. 103(4), pages 545-558, December.
    11. James E. Rauch, 2001. "Business and Social Networks in International Trade," Journal of Economic Literature, American Economic Association, vol. 39(4), pages 1177-1203, December.
    12. Megha Mukim, 2011. "Trade integration, economic geography and productivity: The Indo-Sri Lanka FTA," ERSA conference papers ersa10p176, European Regional Science Association.
    13. Chin Hee Hahn, 2004. "Exporting and Performance of Plants: Evidence from Korean Manufacturing," NBER Working Papers 10208, National Bureau of Economic Research, Inc.
    14. Tineke Fokkema & Eralba Cela & Elena Ambrosetti, 2013. "Giving from the Heart or from the Ego? Motives behind Remittances of the Second Generation in Europe," International Migration Review, Wiley Blackwell, vol. 47(3), pages 539-572, September.
    15. Naudé, Wim & Gries, Thomas & Bilkic, Natasa, 2015. "Playing the lottery or dressing up? A model of firm-level heterogeneity and the decision to export," The Quarterly Review of Economics and Finance, Elsevier, vol. 58(C), pages 1-17.
    16. Marc J. Melitz, 2003. "The Impact of Trade on Intra-Industry Reallocations and Aggregate Industry Productivity," Econometrica, Econometric Society, vol. 71(6), pages 1695-1725, November.
    17. Samuel Admassu, 2019. "A comparative analysis of African and Asian migrants’ effect on trade," Empirical Economics, Springer, vol. 56(6), pages 2079-2092, June.
    18. Elio Londero, 2001. "The alleged countercyclical nature of Argentina's exports of manufactures," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 10(2), pages 151-173.
    19. Sanghoon Ahn, 2004. "Global Competition, Technology Spillovers and Firm Dynamics:," Econometric Society 2004 Far Eastern Meetings 793, Econometric Society.
    20. Shang-Jin Wei, 2000. "How Taxing is Corruption on International Investors?," The Review of Economics and Statistics, MIT Press, vol. 82(1), pages 1-11, February.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bla:reviec:v:13:y:2005:i:1:p:1-19. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Wiley Content Delivery (email available below). General contact details of provider: http://www.blackwellpublishing.com/journal.asp?ref=0965-7576 .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.