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Learning by Doing, Trade in Capital Goods and Growth

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  • Goh, Ai-Ting

    (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES) ; National University of Singapore)

  • Olivier, Jacques

    (UNIVERSITE CATHOLIQUE DE LOUVAIN, Institut de Recherches Economiques et Sociales (IRES) ; National University of Singapore ; HEC School of Management ; CEPPR)

Abstract

The paper aims at reconciling theoretical models of endogenous growth with the empirical evidence on trade and growth. In particular, we show that the conventional wisdom according to which trade is growth-impairing for a country with comparative advantage in goods with limited opportunities for learning fails to hold when the imported good is a capital good. The intuition is that the country gains access to cheaper capital goods, which raises investment, output per worker and learning by doing.

Suggested Citation

  • Goh, Ai-Ting & Olivier, Jacques, 2001. "Learning by Doing, Trade in Capital Goods and Growth," LIDAM Discussion Papers IRES 2001002, Université catholique de Louvain, Institut de Recherches Economiques et Sociales (IRES).
    • Handle: RePEc:ctl:louvir:2001002
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    File URL: http://sites.uclouvain.be/econ/DP/IRES/2001-2.pdf
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    Cited by:

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    2. Maria Bas & Antoine Berthou, 2017. "Does Input-Trade Liberalization Affect Firms’ Foreign Technology Choice?," The World Bank Economic Review, World Bank, vol. 31(2), pages 351-384.
    3. Christine Mutz & Thomas Ziesemer, 2008. "Simultaneous estimation of income and price elasticities of export demand, scale economies and total factor productivity growth for Brazil," Applied Economics, Taylor & Francis Journals, vol. 40(22), pages 2921-2937.
    4. Baldwin, Richard E. & Martin, Philippe, 2004. "Agglomeration and regional growth," Handbook of Regional and Urban Economics, in: J. V. Henderson & J. F. Thisse (ed.), Handbook of Regional and Urban Economics, edition 1, volume 4, chapter 60, pages 2671-2711, Elsevier.
    5. Subhadip Mukherjee & Rupa Chanda, 2019. "Trade Liberalization and Indian Manufacturing MSMEs: Role of Firm Characteristics and Channel of Liberalization," The European Journal of Development Research, Palgrave Macmillan;European Association of Development Research and Training Institutes (EADI), vol. 31(4), pages 984-1062, September.
    6. Zeng, Jing & Zhang, Bingqian & Li, Kevin K., 2024. "The impact of free trade zones on ESG performance: Evidence from China," International Review of Economics & Finance, Elsevier, vol. 91(C), pages 1110-1122.
    7. Christiaans, Thomas, 2008. "International trade and industrialization in a non-scale model of economic growth," Structural Change and Economic Dynamics, Elsevier, vol. 19(3), pages 221-236, September.
    8. Domeland, Dorte, 2007. "Trade and human capital accumulation: evidence from U.S. immigrants," Policy Research Working Paper Series 4144, The World Bank.
    9. Hildegunn Ekroll Stokke & Jørn Rattsø & Xinshen Diao, 2001. "Learning by Exporting and Productivity-investment Interaction: An Intertemporal General Equilibrium Analysis of the Growth Process in Thailand," Working Paper Series 2302, Department of Economics, Norwegian University of Science and Technology.
    10. Mellati, Ali, 2008. "Technology, Trade Specialization and Development: Jumping to Technology Development Era," MPRA Paper 26643, University Library of Munich, Germany.
    11. An, Galina & Iyigun, Murat F., 2004. "The export technology content, learning by doing and specialization in foreign trade," Journal of International Economics, Elsevier, vol. 64(2), pages 465-483, December.
    12. Sucharita Ghosh & Camilla Mastromarco, 2013. "Cross-border Economic Activities, Human Capital and Efficiency: A Stochastic Frontier Analysis for OECD Countries," The World Economy, Wiley Blackwell, vol. 36(6), pages 761-785, June.
    13. C. Veeramani, 2008. "Impact of imported intermediate and capital goods on economic growth: A Cross country analysis," Indira Gandhi Institute of Development Research, Mumbai Working Papers 2008-029, Indira Gandhi Institute of Development Research, Mumbai, India.

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    More about this item

    Keywords

    trade; capital goods; growth;
    All these keywords.

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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