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A Technology-gap Approach to Cumulative Growth -Toward an Integrated Model Empirical Evidence for Spain, 1960-1997

Listed author(s):
  • Fulvio Castellacci

The purpose of the present paper is to explore the possibility to compound in a unique formalization two different but complementary theories of technical change and macroeconomic growth, that is the Kaldorian idea of cumulative causation and the technology-gap approach to economic growth. . The main findings of the first three sections are: an higher rate of diffusion or creation of innovative activity in a country determines a higher and stable rate of productivity increase only if it is "sustained" by the technological characteristics of the system, by the prevailing type of investment of firms and by the distribution of the productivity increases between profit earners and wage perceivers. In other words, what matters for growth is not just innovation, accumulation or distribution, but their structural compatibility over time. Many different growth regimes are theoretically possible, but only some of them lead to a cumulative-technology-gap led growth. As a first experiment, the model has been empirically tested for the case of Spain in the period 1960-1997. The results of the estimations show that there has been a structural break with the transformation from a Kaldorian cumulative growth regime led by internal consumption, in the first period (1960-1975), to a technology-gap growth regime, in the second period (1982-1990). Hence, as a general conclusion for the case of Spain, the Kaldorian cumulative causation process and the technology-gap growth appear to be alternative rather than complementary explanations of economic growth. It is then necessary in future works to extend the empirical test of the model to a set of advanced countries, in order to investigate whether this conclusion is common to other countries, or rather it is peculiar to the evolution of the Spanish growth regime.

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Paper provided by DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies in its series DRUID Working Papers with number 01-04.

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Date of creation: 2001
Handle: RePEc:aal:abbswp:01-04
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  1. Fagerberg, Jan, 1988. "International Competitiveness," Economic Journal, Royal Economic Society, vol. 98(391), pages 355-374, June.
  2. Fagerberg, Jan, 1987. "A technology gap approach to why growth rates differ," Research Policy, Elsevier, vol. 16(2-4), pages 87-99, August.
  3. Abramovitz, Moses, 1986. "Catching Up, Forging Ahead, and Falling Behind," The Journal of Economic History, Cambridge University Press, vol. 46(02), pages 385-406, June.
  4. Fingleton, B & McCombie, J S L, 1998. "Increasing Returns and Economic Growth: Some Evidence for Manufacturing from the European Union Regions," Oxford Economic Papers, Oxford University Press, vol. 50(1), pages 89-105, January.
  5. Fagerberg, Jan, 1994. "Technology and International Differences in Growth Rates," Journal of Economic Literature, American Economic Association, vol. 32(3), pages 1147-1175, September.
  6. Dalum, Bent & Laursen, Keld & Verspagen, Bart, 1999. "Does Specialization Matter for Growth?," Industrial and Corporate Change, Oxford University Press, vol. 8(2), pages 267-288, June.
  7. Jan Fagerberg, 1999. "The Economic Challenge for Europe: Adapting to Innovation-Based Growth," Working Papers 2, Centre for Technology, Innovation and Culture, University of Oslo.
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