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Does Technology Foster Trade? Empirical Evidence for Developed and Developing Countries

  • Inmaculada Martínez-Zarzoso
  • Laura Márquez-Ramos

This paper aims to investigate the effects of technology on international trade flows. In order to do so, the authors use a composite index designed to capture the performance of countries concerning technology and human knowledge as a new explanatory variable in an augmented gravity equation estimated for a sample of 62 developed and developing countries. Results show that geographical factors are always relevant, however geographical distance, being landlocked, technological and social factors seem to be more important for the poorest than for the richest countries. Transport infrastructure and technology can be considered as barriers to trade for those countries with lower endowment levels, therefore investing in these variables will increase the participation of the poorest countries in the world economy. Copyright IAES 2005

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File URL: http://hdl.handle.net/10.1007/s11293-005-1645-0
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Article provided by International Atlantic Economic Society in its journal Atlantic Economic Journal.

Volume (Year): 33 (2005)
Issue (Month): 1 (March)
Pages: 55-69

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Handle: RePEc:kap:atlecj:v:33:y:2005:i:1:p:55-69
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  1. Xavier Sala-i-Martin, 1995. "The classical approach to convergence analysis," Economics Working Papers 117, Department of Economics and Business, Universitat Pompeu Fabra.
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