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Complementarity between human capital and trade in regional technological progress

  • Guadalupe Serrano
  • Enrique Lopez Bazo
  • Jose Ramon Garcia Sanchi

    (Universitat de Barcelona)

The effect of openness and trade orientation on economic growth remains a highly contentious issue in the literature. Trade facilitates the spread of knowledge and the adoption of more advanced and efficient technologies, which hastens total factor productivity (TFP) growth and, hence, per capita income. New technologies that spread through trade require a sufficiently skilled labour force to adapt them to the domestic productive environment. Thus, openness and human capital accumulation will lead to TFP growth and the greater the complementarity between both variables, the higher the TFP growth. This paper discusses the implications of these assumptions and tests their empirical validity, using a pool of data for manufacturing industry in Spanish regions in a period in which both the stock of human capital and openness experienced a notable increase.

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Paper provided by Universitat de Barcelona. Espai de Recerca en Economia in its series Working Papers in Economics with number 83.

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Length: 38 pages
Date of creation: 2002
Handle: RePEc:bar:bedcje:200283
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