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Trade Liberalization, Democratization and Technology Adoption

  • Matteo Cervellati
  • Alireza Naghavi
  • Farid Toubal

We study the role of trade liberalization, democratization and their interaction for technology adoption. A general equilibrium theory with heterogeneous skills predicts a complementarity between trade and political regimes. Openness should accelerate technology adoption if coupled with democratization but may lead to a slowdown if these regime changes are imbalanced. We use panel data on technology adoption at the sectoral level for the period 1980-2000. We exploit within country variation and the heterogenous timing of openness and democratization. The results document the existence of a positive interaction between these institutional changes for technology adoption.

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Paper provided by CEPII research center in its series Working Papers with number 2014-08.

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Date of creation: Mar 2014
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Handle: RePEc:cii:cepidt:2014-08
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