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Technology Trade in Economic Development

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  • Matthias Busse
  • José L. Groizard

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 variables approach. Copyright 2007 The Authors.

Suggested Citation

  • Matthias Busse & José L. Groizard, 2008. "Technology Trade in Economic Development," The World Economy, Wiley Blackwell, vol. 31(4), pages 569-592, April.
  • Handle: RePEc:bla:worlde:v:31:y:2008:i:4:p:569-592
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    Cited by:

    1. Andrea Fracasso & Giuseppe Vittucci Marzetti, 2013. "An empirical note on international R&D spillovers," Empirical Economics, Springer, vol. 45(1), pages 179-191, August.
    2. Jose Groizard, 2009. "Technology Trade," Journal of Development Studies, Taylor & Francis Journals, vol. 45(9), pages 1526-1544.
    3. Mellati, Ali, 2008. "Technology, Trade Specialization and Development: Jumping to Technology Development Era," MPRA Paper 26643, University Library of Munich, Germany.
    4. Krammer, Sorin M.S., 2014. "Assessing the relative importance of multiple channels for embodied and disembodied technological spillovers," Technological Forecasting and Social Change, Elsevier, vol. 81(C), pages 272-286.
    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.
    6. Herrerias, M.J. & Orts, Vicente, 2011. "Imports and growth in China," Economic Modelling, Elsevier, vol. 28(6), pages 2811-2819.

    More about this item

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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