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Is economic freedom necessary for technology diffusion?


  • Sam Green
  • Andrew Melnyk
  • Dennis Powers


Benhabib and Spiegel (1996) argue that human capital increases technological diffusion and, as a result, has a positive effect on economic growth. When human capital is accounted for in this way they find that other institutional variables do not affect growth. Their finding are re-examined by considering the effects of economic freedom on technology spillovers, hence on growth, and it is found that the greater the economic freedom in a country, the greater the amount of technological diffusion. More generally, this research suggests that institutional variables which are captured by economic freedom do indeed have an impact on growth, but only through technological diffusion. However, after accounting for the effects of economic freedom on technological diffusion, there is only weak evidence that human capital has a positive effect on technological diffusion.

Suggested Citation

  • Sam Green & Andrew Melnyk & Dennis Powers, 2002. "Is economic freedom necessary for technology diffusion?," Applied Economics Letters, Taylor & Francis Journals, vol. 9(14), pages 907-910.
  • Handle: RePEc:taf:apeclt:v:9:y:2002:i:14:p:907-910 DOI: 10.1080/13504850210135705

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    References listed on IDEAS

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    5. Tsionas, Efthymios G., 2001. "P-STAR analysis in a converging economy: the case of Greece," Economic Modelling, Elsevier, vol. 18(1), pages 49-60, January.
    6. Efthymios Tsionas & George Halkos, 2000. "Posterior Analysis of Environmental Damage Evaluation in Europe," International Review of Applied Economics, Taylor & Francis Journals, vol. 14(3), pages 371-390.
    7. Abrams, Burton A, 1999. "The Effect of Government Size on the Unemployment Rate," Public Choice, Springer, vol. 99(3-4), pages 395-401, June.
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    Cited by:

    1. Krieger, Tim & Meierrieks, Daniel, 2016. "Political capitalism: The interaction between income inequality, economic freedom and democracy," European Journal of Political Economy, Elsevier, vol. 45(C), pages 115-132.
    2. Jakob De Haan & Susanna Lundström & Jan-Egbert Sturm, 2006. "Market-oriented institutions and policies and economic growth: A critical survey," Journal of Economic Surveys, Wiley Blackwell, vol. 20(2), pages 157-191, April.
    3. Hossein Panahi & Ahmad Assadzadeh & Ramiar Refaei, 2014. "Economic Freedom and Economic Growth in Mena Countries," Asian Economic and Financial Review, Asian Economic and Social Society, vol. 4(1), pages 105-116, January.

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