IDEAS home Printed from https://ideas.repec.org/p/bge/wpaper/321.html
   My bibliography  Save this paper

North-South Trade and Directed Technical Change

Author

Listed:
  • Gino Gancia
  • Alessandra Bonfiglioli

Abstract

In a world where poor countries provide weak protection for intellectual property rights (IPRs), market integration shifts technical change in favor of rich nations. Through this channel, free trade may amplify international income differences. At the same time, integration with countries where IPRs are weakly protected can slow down the world growth rate. An important implication of these results is that protection of intellectual property is most beneficial in open countries. This prediction, which is novel in the literature, is consistent with evidence from a panel of 53 countries observed in the years 1965-1990. The paper also provides empirical support for the mechanism linking North-South trade to the direction of technical change: an increase in import penetration from low-wage, low-IPRs, countries is followed by a sharp fall in R&D investment in a panel of US manufacturing sectors.

Suggested Citation

  • Gino Gancia & Alessandra Bonfiglioli, 2003. "North-South Trade and Directed Technical Change," Working Papers 321, Barcelona Graduate School of Economics.
  • Handle: RePEc:bge:wpaper:321
    as

    Download full text from publisher

    File URL: http://www.barcelonagse.eu/sites/default/files/working_paper_pdfs/321.pdf
    Download Restriction: no

    Other versions of this item:

    References listed on IDEAS

    as
    1. Caselli, Francesco & Wilson, Daniel J., 2004. "Importing technology," Journal of Monetary Economics, Elsevier, pages 1-32.
    2. Paul Beaudry & Fabrice Collard & David A. Green, 2002. "Decomposing the Twin-peaks in the World Distribution of Output-per-worker," NBER Working Papers 9240, National Bureau of Economic Research, Inc.
    3. Diwan, Ishac & Rodrik, Dani, 1991. "Patents, appropriate technology, and North-South trade," Journal of International Economics, Elsevier, pages 27-47.
    4. Rod Falvey & Neil Foster & David Greenaway, 2006. "Intellectual Property Rights and Economic Growth," Review of Development Economics, Wiley Blackwell, vol. 10(4), pages 700-719, November.
    5. Gould, David M. & Gruben, William C., 1996. "The role of intellectual property rights in economic growth," Journal of Development Economics, Elsevier, pages 323-350.
    6. Robert E. Hall & Charles I. Jones, 1999. "Why do Some Countries Produce So Much More Output Per Worker than Others?," The Quarterly Journal of Economics, Oxford University Press, vol. 114(1), pages 83-116.
    7. Daron Acemoglu & Jaume Ventura, 2002. "The World Income Distribution," The Quarterly Journal of Economics, Oxford University Press, vol. 117(2), pages 659-694.
    8. OLIVIER, Jacques & GOH, Ai-Ting, 2001. "Free trade and protection of intellectual property rights : can we have one without the other?," Les Cahiers de Recherche 730, HEC Paris.
    9. Gene M. Grossman & Edwin L.-C. Lai, 2004. "International Protection of Intellectual Property," American Economic Review, American Economic Association, pages 1635-1653.
    10. Daron Acemoglu & Fabrizio Zilibotti, 2001. "Productivity Differences," The Quarterly Journal of Economics, Oxford University Press, pages 563-606.
    11. Bernard, Andrew B. & Jensen, J. Bradford & Schott, Peter K., 2006. "Survival of the best fit: Exposure to low-wage countries and the (uneven) growth of U.S. manufacturing plants," Journal of International Economics, Elsevier, pages 219-237.
    12. Eaton, Jonathan & Kortum, Samuel, 2001. "Trade in capital goods," European Economic Review, Elsevier, vol. 45(7), pages 1195-1235.
    13. Wolfgang Keller, 2004. "International Technology Diffusion," Journal of Economic Literature, American Economic Association, pages 752-782.
    14. Alwyn Young, 1991. "Learning by Doing and the Dynamic Effects of International Trade," The Quarterly Journal of Economics, Oxford University Press, vol. 106(2), pages 369-405.
    15. Dinopoulos, Elias & Segerstrom, Paul, 2003. "A Theory of North-South Trade and Globalization," CEPR Discussion Papers 4140, C.E.P.R. Discussion Papers.
    16. Saint-Paul, Gilles, 2008. "Welfare Effects of Intellectual Property in a North-South Model of Endogenous Growth with Comparative Advantage," Economics - The Open-Access, Open-Assessment E-Journal, Kiel Institute for the World Economy (IfW), vol. 2, pages 1-24.
    17. Gene M. Grossman & Edwin L.-C. Lai, 2004. "International Protection of Intellectual Property," American Economic Review, American Economic Association, pages 1635-1653.
    18. Guifang Yang & Maskus, Keith E., 2003. "Intellectual property rights, licensing, and innovation," Policy Research Working Paper Series 2973, The World Bank.
    19. Oded Galor & Andrew Mountford, 2008. "Trading Population for Productivity: Theory and Evidence," Review of Economic Studies, Oxford University Press, pages 1143-1179.
    20. Bronwyn H. Hall & Adam B. Jaffe & Manuel Trajtenberg, 2001. "The NBER Patent Citation Data File: Lessons, Insights and Methodological Tools," NBER Working Papers 8498, National Bureau of Economic Research, Inc.
    21. Diwan, Ishac & Rodrik, Dani, 1991. "Patents, appropriate technology, and North-South trade," Journal of International Economics, Elsevier, pages 27-47.
    22. Paolo Epifani & Gino Gancia, 2009. "Openness, Government Size and the Terms of Trade," Review of Economic Studies, Oxford University Press, vol. 76(2), pages 629-668.
    23. Gino Gancia & Fabrizio Zilibotti, 2005. "Horizontal innovation in the theory of growth and development," Economics Working Papers 831, Department of Economics and Business, Universitat Pompeu Fabra.
    24. Daron Acemoglu & Philippe Aghion & Fabrizio Zilibotti, 2006. "Distance to Frontier, Selection, and Economic Growth," Journal of the European Economic Association, MIT Press, vol. 4(1), pages 37-74, March.
    25. Alwyn Young, 1998. "Growth without Scale Effects," Journal of Political Economy, University of Chicago Press, vol. 106(1), pages 41-63, February.
    26. Helpman, E., 1992. "Innovation, Imitation and intellectual Property Rights," Harvard Institute of Economic Research Working Papers 1597, Harvard - Institute of Economic Research.
    27. Oded Galor & Andrew Mountford, 2004. "Trading Population for Productivity," GE, Growth, Math methods 0410001, EconWPA.
    28. Paolo Epifani & Gino Gancia, 2005. "On Globalization and the Growth of Governments," Working Papers 267, Barcelona Graduate School of Economics.
    29. Gancia, Gino & Zilibotti, Fabrizio, 2005. "Horizontal Innovation in the Theory of Growth and Development," Handbook of Economic Growth,in: Philippe Aghion & Steven Durlauf (ed.), Handbook of Economic Growth, edition 1, volume 1, chapter 3, pages 111-170 Elsevier.
    30. Adam B. Jaffe & Manuel Trajtenberg & Rebecca Henderson, 1993. "Geographic Localization of Knowledge Spillovers as Evidenced by Patent Citations," The Quarterly Journal of Economics, Oxford University Press, pages 577-598.
    31. Dornbusch, Rudiger & Fischer, Stanley & Samuelson, Paul A, 1977. "Comparative Advantage, Trade, and Payments in a Ricardian Model with a Continuum of Goods," American Economic Review, American Economic Association, pages 823-839.
    32. Segerstrom, Paul S, 1998. "Endogenous Growth without Scale Effects," American Economic Review, American Economic Association, pages 1290-1310.
    33. Alwyn Young, 1991. "Learning by Doing and the Dynamic Effects of International Trade," NBER Working Papers 3577, National Bureau of Economic Research, Inc.
    34. Jeffrey D. Sachs & Andrew Warner, 1995. "Economic Reform and the Process of Global Integration," Brookings Papers on Economic Activity, Economic Studies Program, The Brookings Institution, pages 1-118.
    35. R. Dornbusch & S. Fischer & P. A. Samuelson, 1976. "Comparative Advantage, Trade and Payments in a Ricardian Model With a Continuum of Goods," Working papers 178, Massachusetts Institute of Technology (MIT), Department of Economics.
    36. Yang, Guifang & Maskus, Keith E., 2001. "Intellectual property rights, licensing, and innovation in an endogenous product-cycle model," Journal of International Economics, Elsevier, pages 169-187.
    37. Daron Acemoglu, 2003. "Patterns of Skill Premia," Review of Economic Studies, Oxford University Press, vol. 70(2), pages 199-230.
    38. Lai, Edwin L. -C., 1998. "International intellectual property rights protection and the rate of product innovation," Journal of Development Economics, Elsevier, pages 133-153.
    39. Helpman, Elhanan, 1993. "Innovation, Imitation, and Intellectual Property Rights," Econometrica, Econometric Society, vol. 61(6), pages 1247-1280, November.
    40. David N. DeJong & Marla Ripoll, 2006. "Tariffs and Growth: An Empirical Exploration of Contingent Relationships," The Review of Economics and Statistics, MIT Press, pages 625-640.
    41. Glass, Amy Jocelyn & Saggi, Kamal, 2002. "Intellectual property rights and foreign direct investment," Journal of International Economics, Elsevier, pages 387-410.
    42. Paul Beaudry & Fabrice Collard & David A. Green, 2005. "Changes in the World Distribution of Output Per Worker, 1960-1998: How a Standard Decomposition Tells an Unorthodox Story," The Review of Economics and Statistics, MIT Press, pages 741-753.
    43. Ginarte, Juan C. & Park, Walter G., 1997. "Determinants of patent rights: A cross-national study," Research Policy, Elsevier, pages 283-301.
    44. Taylor, M Scott, 1994. "TRIPs, Trade, and Growth," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 35(2), pages 361-381, May.
    45. Jeffrey Sachs & Andrew Warner, 1995. "Economic Reform and the Progress of Global Integration," Harvard Institute of Economic Research Working Papers 1733, Harvard - Institute of Economic Research.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Li, Shang-ao & Pan, Shan & Chi, Shawn, 2016. "North–South FDI and directed technical change," Economic Modelling, Elsevier, vol. 59(C), pages 425-435.
    2. Chu, Angus C. & Cozzi, Guido & Furukawa, Yuichi, 2016. "Unions, innovation and cross-country wage inequality," Journal of Economic Dynamics and Control, Elsevier, pages 104-118.
    3. Martin Davies, 2015. "Technology transfer and North-South," CAMA Working Papers 2015-18, Centre for Applied Macroeconomic Analysis, Crawford School of Public Policy, The Australian National University.
    4. Acemoglu, Daron & Gancia, Gino & Zilibotti, Fabrizio, 2012. "Competing engines of growth: Innovation and standardization," Journal of Economic Theory, Elsevier, pages 570-601.3.
    5. Chu, Angus C. & Cozzi, Guido & Furukawa, Yuichi, 2014. "Labor Unions, Directed Technical Change and Cross-Country Income Inequality," MPRA Paper 58886, University Library of Munich, Germany.
    6. Saint-Paul, Gilles, 2008. "Welfare Effects of Intellectual Property in a North-South Model of Endogenous Growth with Comparative Advantage," Economics - The Open-Access, Open-Assessment E-Journal, Kiel Institute for the World Economy (IfW), pages 1-24.
    7. Hémous, David, 2016. "The dynamic impact of unilateral environmental policies," Journal of International Economics, Elsevier, pages 80-95.
    8. Demir, Caner, 2016. "Do Technology Transfer and IPR Spur Domestic Innovation?: An International Panel Data Analysis," MPRA Paper 76693, University Library of Munich, Germany.
    9. Óscar Afonso & Tiago Sequeira, 2017. "Tradable and nontradable directed technical change," CEFAGE-UE Working Papers 2017_02, University of Evora, CEFAGE-UE (Portugal).
    10. Auer, Raphael A., 2015. "Human capital and the dynamic effects of trade," Journal of Development Economics, Elsevier, pages 107-118.
    11. Dinopoulos, Elias & Segerstrom, Paul, 2010. "Intellectual property rights, multinational firms and economic growth," Journal of Development Economics, Elsevier, pages 13-27.
    12. Gino Gancia & Andreas Müller & Fabrizio Zilibotti, 2010. "Structural development accounting," Economics Working Papers 1249, Department of Economics and Business, Universitat Pompeu Fabra, revised Feb 2011.
    13. Daron Acemoglu & Gino Gancia & Fabrizio Zilibotti, 2015. "Offshoring and Directed Technical Change," American Economic Journal: Macroeconomics, American Economic Association, pages 84-122.
    14. Tian, Xian-Liang, 2017. "Sector-specific IPR protection to overcome technology-skill mismatch in South? A simple model," Mathematical Social Sciences, Elsevier, vol. 85(C), pages 44-51.
    15. Dellachiesa, Alejandro E. & Myint, Aung P., 2016. "Trade openness and the changing water polluting intensity patterns of ‘dirty’ and ‘clean’ industrial sectors," Ecological Economics, Elsevier, vol. 129(C), pages 143-151.
    16. Angus Chu & Guido Cozzi & Yuichi Furukawa, 2015. "Effects of Economic Development in China on Skill-Biased Technical Change in the US," Review of Economic Dynamics, Elsevier for the Society for Economic Dynamics, vol. 18(2), pages 227-242, April.
    17. Nils Herger, 2015. "An uncovered interest parity condition that worked - The continental investment demand for London bills of exchange during the gold standard (1880 -1914)," Working Papers 15.04, Swiss National Bank, Study Center Gerzensee.
    18. Auriol, Emmanuelle & Biancini, Sara & Paillacar, Rodrigo, 2015. "Intellectual Property Rights Protection and Trade," CEPR Discussion Papers 10602, C.E.P.R. Discussion Papers.
    19. Auer, Raphael A., 2015. "Human capital and the dynamic effects of trade," Journal of Development Economics, Elsevier, pages 107-118.

    More about this item

    Keywords

    economic growth; north-south trade; directed technical change; intellectual property rights; Cross-Country Income Differences.;

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:bge:wpaper:321. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Bruno Guallar). General contact details of provider: http://edirc.repec.org/data/bargses.html .

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.