IDEAS home Printed from https://ideas.repec.org/p/cge/wacage/261.html
   My bibliography  Save this paper

Measuring Changes in the Bilateral Technology Gaps between China, India and the U.S. 1979 - 2008

Author

Listed:
  • Shen, Keting

    (University of Western Ontario, Canada and Zhejiang Gongshang University, China)

  • Wang, Jing

    (University of Western Ontario, Canada)

  • Whalley, John

    (University of Western Ontario, Canada)

Abstract

Popular literature suggests a rapid narrowing of the technology gap between China and the U.S. based on large percentage increases in Chinese patent applications, and equally large increases in college registrants and completed PhDs (especially in sciences) in China in recent years. Little literature attempts to measure the technology gap directly using estimates of country aggregate technologies. This gap is usually thought to be smaller than differences in GDP per capita since the later reflect both differing factor endowments and technology parameters. This paper assesses changes in China’s technology gaps both with the U.S. and India between 1979 and 2008, comparing the technology level of these economies using a CES production framework in which the technology gap is reflected in the change of technology parameters. Our measure is related to but differs from the Malmquist index. We determine the parameter values for country technology by using calibration procedures. Our calculations suggest that the technology gap between China and the U.S. is significantly larger than that between India and the U.S. for the period before 2008. The pairwise gaps between the U.S. and China, and the U.S. and India remain large while narrowing at a slower rate than GDP per worker. Although China has a higher growth rate of total factor productivity than India over the period, the bilateral technology gap between China and India is still in India’s favor. India had higher income per worker than China in the 1970’s, and China’s much more rapid physical and human capital accumulation has allowed China to move ahead, but a bilateral technology gap remains.

Suggested Citation

  • Shen, Keting & Wang, Jing & Whalley, John, 2016. "Measuring Changes in the Bilateral Technology Gaps between China, India and the U.S. 1979 - 2008," CAGE Online Working Paper Series 261, Competitive Advantage in the Global Economy (CAGE).
  • Handle: RePEc:cge:wacage:261
    as

    Download full text from publisher

    File URL: http://www2.warwick.ac.uk/fac/soc/economics/research/centres/cage/manage/publications/261-2016_whalley.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. 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.
    2. Bjurek, Hans, 1996. " The Malmquist Total Factor Productivity Index," Scandinavian Journal of Economics, Wiley Blackwell, vol. 98(2), pages 303-313, June.
    3. Klump, Rainer & Saam, Marianne, 2008. "Calibration of normalised CES production functions in dynamic models," Economics Letters, Elsevier, vol. 99(2), pages 256-259, May.
    4. Rainer Klump & Peter McAdam & Alpo Willman, 2012. "The Normalized Ces Production Function: Theory And Empirics," Journal of Economic Surveys, Wiley Blackwell, vol. 26(5), pages 769-799, December.
    5. Jing Wang & Dana Medianu & John Whalley, 2011. "The Contribution of China, India and Brazil to Narrowing North-South Differences in GDP/capita, World Trade Shares, and Market Capitalization," NBER Working Papers 17681, National Bureau of Economic Research, Inc.
    6. Duffy, John & Papageorgiou, Chris, 2000. "A Cross-Country Empirical Investigation of the Aggregate Production Function Specification," Journal of Economic Growth, Springer, vol. 5(1), pages 87-120, March.
    7. Peter Howitt, 2000. "Endogenous Growth and Cross-Country Income Differences," American Economic Review, American Economic Association, vol. 90(4), pages 829-846, September.
    8. Chang-Tai Hsieh & Peter J. Klenow, 2009. "Misallocation and Manufacturing TFP in China and India," The Quarterly Journal of Economics, Oxford University Press, vol. 124(4), pages 1403-1448.
    9. Barry Bosworth & Susan M. Collins, 2008. "Accounting for Growth: Comparing China and India," Journal of Economic Perspectives, American Economic Association, vol. 22(1), pages 45-66, Winter.
    10. Arne Henningsen & Géraldine Henningsen, 2011. "Econometric Estimation of the “Constant Elasticity of Substitution" Function in R: Package micEconCES," IFRO Working Paper 2011/9, University of Copenhagen, Department of Food and Resource Economics.
    11. Rainer Klump & Harald Preissler, 2000. "CES Production Functions and Economic Growth," Scandinavian Journal of Economics, Wiley Blackwell, vol. 102(1), pages 41-56, March.
    12. Chirinko, Robert S. & Fazzari, Steven M. & Meyer, Andrew P., 1999. "How responsive is business capital formation to its user cost?: An exploration with micro data," Journal of Public Economics, Elsevier, vol. 74(1), pages 53-80, October.
    13. Arto Luoma & Jani Luoto, 2010. "The Aggregate Production Function of the Finnish Economy in the Twentieth Century," Southern Economic Journal, Southern Economic Association, vol. 76(3), pages 723-737, January.
    14. Richard Herd & Sean Dougherty, 2007. "Growth Prospects in China and India Compared," European Journal of Comparative Economics, Cattaneo University (LIUC), vol. 4(1), pages 65-89, June.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Keting Shen & Jing Wang & John Whalley, 2015. "Measuring Changes in the Bilateral Technology Gaps between China, India and the U.S. 1979 - 2008," NBER Working Papers 21657, National Bureau of Economic Research, Inc.
    2. Michael Knoblach & Fabian Stöckl, 2020. "What Determines The Elasticity Of Substitution Between Capital And Labor? A Literature Review," Journal of Economic Surveys, Wiley Blackwell, vol. 34(4), pages 847-875, September.
    3. Matthew K. Heun & João Santos & Paul E. Brockway & Randall Pruim & Tiago Domingos & Marco Sakai, 2017. "From Theory to Econometrics to Energy Policy: Cautionary Tales for Policymaking Using Aggregate Production Functions," Energies, MDPI, Open Access Journal, vol. 10(2), pages 1-44, February.
    4. Paul E. Brockway & Matthew K. Heun & João Santos & John R. Barrett, 2017. "Energy-Extended CES Aggregate Production: Current Aspects of Their Specification and Econometric Estimation," Energies, MDPI, Open Access Journal, vol. 10(2), pages 1-23, February.
    5. Federici, Daniela & Saltari, Enrico, 2018. "Elasticity Of Substitution And Technical Progress: Is There A Misspecification Problem?," Macroeconomic Dynamics, Cambridge University Press, vol. 22(1), pages 101-121, January.
    6. Kan, Kamhon & Wang, Yong, 2013. "Comparing China and India: A factor accumulation perspective," Journal of Comparative Economics, Elsevier, vol. 41(3), pages 879-894.
    7. Rainer Klump & Peter McAdam & Alpo Willman, 2012. "The Normalized Ces Production Function: Theory And Empirics," Journal of Economic Surveys, Wiley Blackwell, vol. 26(5), pages 769-799, December.
    8. Manuel A. Gómez, 2020. "Factor substitution, long‐run growth, and speed of convergence in the one‐sector convex endogenous‐growth model," Metroeconomica, Wiley Blackwell, vol. 71(1), pages 2-21, February.
    9. DURAND-LASSERVE, Olivier & Pierru , Axel & SMEERS, Yves, 2012. "Sensitivity of policy simulation to benchmark scenarios in CGE models: illustration with carbon leakage," LIDAM Discussion Papers CORE 2012063, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    10. Robert S. Chirinko, 2008. "ó: The Long And Short Of It," CESifo Working Paper Series 2234, CESifo.
    11. Knoblach, Michael & Rößler, Martin & Zwerschke, Patrick, 2016. "The Elasticity of Factor Substitution Between Capital and Labor in the U.S. Economy: A Meta-Regression Analysis," CEPIE Working Papers 03/16, Technische Universität Dresden, Center of Public and International Economics (CEPIE).
    12. Dalila Nicet-Chenaf & Eric Rougier, 2009. "Human capital and structural change: how do they interact with each others in growth," Post-Print hal-00798441, HAL.
    13. Klump, Rainer & McAdam, Peter & Willman, Alpo, 2004. "Factor substitution and factor augmenting technical progress in the US: a normalized supply-side system approach," Working Paper Series 367, European Central Bank.
    14. Pena, Jorge & Orte, Manuel De & Guasch, J. Luis & Escribano, Álvaro, 2008. "Investment climate assessment based on demean Olley and Pakes decompositions: methodology and application to Turkey's investment climate survey," UC3M Working papers. Economics we082012, Universidad Carlos III de Madrid. Departamento de Economía.
    15. Jerzmanowski, Michal & Tamura, Robert, 2019. "Directed technological change & cross-country income differences: A quantitative analysis," Journal of Development Economics, Elsevier, vol. 141(C).
    16. Laura Alfaro & Andrew Charlton & Fabio Kanczuk, 2009. "Plant-Size Distribution and Cross-Country Income Differences," NBER Chapters, in: NBER International Seminar on Macroeconomics 2008, pages 243-272, National Bureau of Economic Research, Inc.
    17. Bah, El-hadj & Fang, Lei, 2015. "Impact of the business environment on output and productivity in Africa," Journal of Development Economics, Elsevier, vol. 114(C), pages 159-171.
    18. Sriram Shankar & B. Bhaskara Rao, 2013. "Estimates of the Long-Run Growth Rate of A ustralia," Economic Papers, The Economic Society of Australia, vol. 32(1), pages 95-98, March.
    19. Francesco Caselli & Wilbur John Coleman II, 2006. "The World Technology Frontier," American Economic Review, American Economic Association, vol. 96(3), pages 499-522, June.
    20. Temple, Jonathan, 2012. "The calibration of CES production functions," Journal of Macroeconomics, Elsevier, vol. 34(2), pages 294-303.

    More about this item

    Keywords

    JEL Classification:;

    NEP fields

    This paper has been announced in the following NEP Reports:

    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:cge:wacage:261. 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: (Jane Snape). General contact details of provider: https://edirc.repec.org/data/dewaruk.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.