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Technological Convergence and International Trade

  • Ben-David, Dan

This paper builds on earlier evidence showing that, while most countries exhibit little evidence of unconditional income convergence, countries that trade heavily with one another tend to exhibit a much higher incidence of convergence. Two alternative explanations for the trade-related convergence are explored here. The first alternative is that the trade-related income convergence is due to a convergence in capital-labour ratios. Little support is found for this explanation. The other alternative examined here is that of a trade-related convergence in technologies. This alternative is corroborated by a high incidence of convergence in total factor productivities among countries that trade heavily with one another – an outcome that is not common between these same countries when they are grouped randomly rather than on the basis of trade.

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Paper provided by C.E.P.R. Discussion Papers in its series CEPR Discussion Papers with number 1359.

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Date of creation: Mar 1996
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Handle: RePEc:cpr:ceprdp:1359
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