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Technology diffusion, international integration and participation in developing economies - a review of major concepts and findings

Author

Listed:
  • T. Gries

    () (International Growth and Business Cycle Theory)

  • R. Grundmann

    (International Growth and Business Cycle Theory)

  • I. Palnau

    (International Growth and Business Cycle Theory)

  • M. Redlin

    (International Growth and Business Cycle Theory)

Abstract

Abstract Technical change is a major driving force for economic growth and development, thus technological change and innovations could be a powerful process that opens up opportunities to increase social welfare and benefits for societies. Whether opportunities turn into real benefits and allow for broad participation depends on a number of factors. In this contribution, we focus on three questions. First, what are the drivers of and the gains from technological change? Second, is there broad participation in the gains from technological change? Third, what mechanisms generate asymmetric participation or even non-participation? Reviewing the literature, we obtain two sets of answers, one set for developed countries (DCs) and one for less developed countries (LDCs). This contribution links up to the article Innovations, Growth and Participation in Advanced Economies - A Review of Major Concepts and Findings (published in the previous issue of IEEP) in which the process of innovation as well as the effects of technological change on growth and distribution has already been discussed for advanced economies. In this contribution, the focus is on developing economies. Technology that originated in DCs is transferred to LDCs. We identify the channels of technological transfer that allow LDCs to potentially participate in the benefits. Here, the development of the modern sector with links to international value chains plays a major role. However, global diffusion of technology and its gains are very diverse. Reasons for this diverse participation in gains include power structures in global value chains combined with an excess supply of labor and the malfunctioning of local governments and institutions in LDCs.

Suggested Citation

  • T. Gries & R. Grundmann & I. Palnau & M. Redlin, 2018. "Technology diffusion, international integration and participation in developing economies - a review of major concepts and findings," International Economics and Economic Policy, Springer, vol. 15(1), pages 215-253, January.
  • Handle: RePEc:kap:iecepo:v:15:y:2018:i:1:d:10.1007_s10368-017-0373-7
    DOI: 10.1007/s10368-017-0373-7
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    Keywords

    Technological change; Global technological transfer; Structural transformation; Development; Inclusiveness;

    JEL classification:

    • F15 - International Economics - - Trade - - - Economic Integration
    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • I24 - Health, Education, and Welfare - - Education - - - Education and Inequality
    • J31 - Labor and Demographic Economics - - Wages, Compensation, and Labor Costs - - - Wage Level and Structure; Wage Differentials
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O15 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Economic Development: Human Resources; Human Development; Income Distribution; Migration
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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