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Measuring a Country's Product Ladder and Technology Level based on Trade Flow

Author

Listed:
  • Kim, Jong-il

    (Dongguk University)

  • Lee , Sung-ah

    (Dongguk University)

Abstract

This study tries to quantify the technology level of products based on the concept of product ladder. While many studies on country technology competitiveness use the aggregate indices such as total factor productivity and revealed comparative advantage, this study estimates the ranking of about 2000 products in product ladder by using SITC 5 digit level export data. Based on the product ladder, this study measures the country and industry ranking and explores the characteristics of the ranking. It provides the international comparison of inter-industry and intra-industry ranking differences in product ladder. The statistical relationships between the ranking in product ladder and the determinants of technology level such as R&D and physical capital investment and wage, confirms that the measured ranking in product ladder could be regarded as an indirect indicator of technology level. The product ladder is applied to the estimation of production function to see the effect of the product differentiation on labor productivity.

Suggested Citation

  • Kim, Jong-il & Lee , Sung-ah, 2006. "Measuring a Country's Product Ladder and Technology Level based on Trade Flow," East Asian Economic Review, Korea Institute for International Economic Policy, vol. 10(1), pages 59-95, June.
    • Handle: RePEc:ris:eaerev:0168
    DOI: 10.11644/KIEP.JEAI.2006.10.1.152
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    More about this item

    Keywords

    Product Ladder; Technology Level; Trade Flow;
    All these keywords.

    JEL classification:

    • F18 - International Economics - - Trade - - - Trade and Environment
    • O24 - Economic Development, Innovation, Technological Change, and Growth - - Development Planning and Policy - - - Trade Policy; Factor Movement; Foreign Exchange Policy
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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