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Economic growth, leadership and capital flows: the leapfrogging effect

Author

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  • Elise Brezis
  • Daniel Tsiddon

Abstract

The leapfrogging effect has been analysed in a model without capital. However, history has shown numerous cases in which countries lost economic leadership at the same time as they were exporting capital. This work focuses on the interaction between international capital flows, economic growth and the transmission of leadership. We show that capital mobility is at the heart of the adoption of new technologies. Malfunctioning international capital markets that prevent capital imports may delay adoption of the new technology by the lagging country and may postpone or even prevent leapfrogging that would have occurred in the case of free flows of capital. The model shows that capital mobility smooths passing the baton in the relay race for economic leadership.

Suggested Citation

  • Elise Brezis & Daniel Tsiddon, 1998. "Economic growth, leadership and capital flows: the leapfrogging effect," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 7(3), pages 261-277.
  • Handle: RePEc:taf:jitecd:v:7:y:1998:i:3:p:261-277
    DOI: 10.1080/09638199800000014
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    Citations

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    Cited by:

    1. van de Klundert, Theo & Smulders, Sjak, 2001. "Loss of technological leadership of rentier economies: a two-country endogenous growth model," Journal of International Economics, Elsevier, vol. 54(1), pages 211-231, June.
    2. Furukawa, Yuichi & Takarada, Yasuhiro, 2013. "Technological change and international interaction in environmental policies," MPRA Paper 44047, University Library of Munich, Germany.
    3. Yuichi Furukawa, 2015. "Leapfrogging cycles in international competition," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 59(2), pages 401-433, June.
    4. Furukawa, Yuichi, 2012. "Perpetual leapfrogging in international competition," MPRA Paper 40126, University Library of Munich, Germany, revised Jul 2012.

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