Advantages of backwardness and forwardness with shifting comparative advantage
This paper develops a multi-sector endogenous innovation model that is able to account for the dynamics of comparative advantage of each sector within the economy. The model in this paper assumes that two kinds of learning effects exist in R&D: advantages of backwardness and forwardness. It is shown that if the economy is divided into advanced and backward sectors, in the latter sectors, the advantage of backwardness dominates, leading to cyclic repetition of comparative advantage. However, in the former sectors, the advantage of forwardness becomes more significant, so comparative advantage among these sectors stabilizes. Thus, the direction of learning spillovers has a critical effect on the dynamics of comparative advantage. Given this result, it is shown that only R&D policies for the marginal sector are effective in facilitating economic growth. If a decision is made to facilitate R&D investment within advanced sectors, R&D taxes, rather than subsidies, should be imposed on this marginal sector. Moreover, it is shown that trade liberalization does not affect the intrinsic dynamics of comparative advantage among surviving sectors in the economy if the locus of this marginal sector does not change significantly after trade liberalization.
If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.
As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.
References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
- Abramovitz, Moses, 1986. "Catching Up, Forging Ahead, and Falling Behind," The Journal of Economic History, Cambridge University Press, vol. 46(02), pages 385-406, June.
- Michael A. Landesmann & Robert Stehrer, 2000. "Industrial Specialization, Catching-up and Labour Market Dynamics," Metroeconomica, Wiley Blackwell, vol. 51(1), pages 67-101, 02.
- Peter Howitt, 2000. "Endogenous Growth and Cross-Country Income Differences," American Economic Review, American Economic Association, vol. 90(4), pages 829-846, September.
- Ulku, Hulya, 2005.
"R&D, Innovation and Growth: Evidence from Four Manufacturing Sectors in OECD Countries,"
Development Economics and Public Policy Working Papers
30542, University of Manchester, Institute for Development Policy and Management (IDPM).
- Hulya Ulku, 2007. "R&D, innovation, and growth: evidence from four manufacturing sectors in OECD countries," Oxford Economic Papers, Oxford University Press, vol. 59(3), pages 513-535, July.
- Howitt, Peter & Mayer-Foulkes, David, 2005.
"R&D, Implementation, and Stagnation: A Schumpeterian Theory of Convergence Clubs,"
Journal of Money, Credit and Banking,
Blackwell Publishing, vol. 37(1), pages 147-77, February.
- Peter Howitt & David Mayer-Foulkes, 2002. "R&D, Implementation and Stagnation: A Schumpeterian Theory of Convergence Clubs," NBER Working Papers 9104, National Bureau of Economic Research, Inc.
- Rachel Griffith & Stephen Redding & John Van Reenen, 2000.
"Mapping the two faces of R&D : productivity growth in a panel of OECD industries,"
LSE Research Online Documents on Economics
784, London School of Economics and Political Science, LSE Library.
- Rachel Griffith & Stephen Redding & John Van Reenen, 2004. "Mapping the Two Faces of R&D: Productivity Growth in a Panel of OECD Industries," The Review of Economics and Statistics, MIT Press, vol. 86(4), pages 883-895, November.
- Rachel Griffith & Stephen Redding & John Van Reenen, 2000. "Mapping the Two Faces of R&D: Productivity Growth in a Panel of OECD Industries," CEP Discussion Papers dp0458, Centre for Economic Performance, LSE.
- Rachel Griffith & Stephen Redding & John Van Reenen, 2000. "Mapping the two faces of R&D: productivity growth in a panel of OECD industries," IFS Working Papers W00/02, Institute for Fiscal Studies.
- Griffith, Rachel & Redding, Stephen J. & Van Reenen, John, 2000. "Mapping The Two Faces Of R&D: Productivity Growth In A Panel Of OECD Industries," CEPR Discussion Papers 2457, C.E.P.R. Discussion Papers.
- Teece, David J., 1986.
"Profiting from technological innovation: Implications for integration, collaboration, licensing and public policy,"
Elsevier, vol. 15(6), pages 285-305, December.
- Teece, David J., 1993. "Profiting from technological innovation: Implications for integration, collaboration, licensing and public policy," Research Policy, Elsevier, vol. 22(2), pages 112-113, April.
- Marios Zachariadis, 2004.
"R&D-induced Growth in the OECD?,"
Review of Development Economics,
Wiley Blackwell, vol. 8(3), pages 423-439, 08.
- Rachel Griffith & Stephen Redding & John Van Reenen, 2003.
"R&D and absorptive capacity : theory and empirical evidence,"
LSE Research Online Documents on Economics
209, London School of Economics and Political Science, LSE Library.
- Rachel Griffith & Stephen Redding & John Van Reenen, 2003. "R&D and Absorptive Capacity: Theory and Empirical Evidence," Scandinavian Journal of Economics, Wiley Blackwell, vol. 105(1), pages 99-118, 03.
- Bent Dalum & Keld Laursen & Gert Villumsen, 1998. "Structural Change in OECD Export Specialisation Patterns: de-specialisation and 'stickiness'," International Review of Applied Economics, Taylor & Francis Journals, vol. 12(3), pages 423-443.
- Irmen, Andreas, 2004.
"Extensive and Intensive Growth in a Neoclassical Framework,"
CEPR Discussion Papers
4266, C.E.P.R. Discussion Papers.
- Irmen, Andreas, 2005. "Extensive and intensive growth in a neoclassical framework," Journal of Economic Dynamics and Control, Elsevier, vol. 29(8), pages 1427-1448, August.
- Marios Zachariadis, 2003.
"R&D, innovation, and technological progress: a test of the Schumpeterian framework without scale effects,"
Canadian Journal of Economics,
Canadian Economics Association, vol. 36(3), pages 566-586, August.
- Marios Zachariadis, . "R&D, Innovation, and Technological Progress: A Test of the Schumpeterian Framework Without Scale Effects," Departmental Working Papers 2002-18, Department of Economics, Louisiana State University.
- Balassa, Bela & Noland, Marcus, 1989. "The changing comparative advantage of Japan and the United States," Journal of the Japanese and International Economies, Elsevier, vol. 3(2), pages 174-188, June.
- Krugman, Paul, 1987. "The narrow moving band, the Dutch disease, and the competitive consequences of Mrs. Thatcher : Notes on trade in the presence of dynamic scale economies," Journal of Development Economics, Elsevier, vol. 27(1-2), pages 41-55, October.
When requesting a correction, please mention this item's handle: RePEc:eee:reecon:v:66:y:2012:i:1:p:72-81. See general information about how to correct material in RePEc.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)
If references are entirely missing, you can add them using this form.