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Economic Development and Technology Diffusion

  • Kurt Hafner

I first present a New Economic Geography model and analyze the impact of R&D on economic development of integrating countries. I find that technology diffusion and skilled labor migration stimulates economic development through fix cost reduction on a firm level. As the inclusion of foreign technology matters for structurally backward countries, I second use time series data for Greece, Portugal, Spain and Ireland representing European integration during the 1980s and 1990s. In considering three different technology diffusion channels, estimates, however, reduces to Portugal as test procedures confirm nonstationarity and cointegration only for this country. I find empirical evidence for bilateral trade as a diffusion channel but not for FDI or foreign patents.

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File URL: http://degit.sam.sdu.dk/papers/degit_12/C012_008.pdf
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Paper provided by DEGIT, Dynamics, Economic Growth, and International Trade in its series DEGIT Conference Papers with number c012_008.

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Length: 30 pages JEL Classification: C22, C68, O30, R12
Date of creation: Jun 2007
Date of revision:
Handle: RePEc:deg:conpap:c012_008
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  1. Zvi Griliches, 1998. "Issues in Assessing the Contribution of Research and Development to Productivity Growth," NBER Chapters, in: R&D and Productivity: The Econometric Evidence, pages 17-45 National Bureau of Economic Research, Inc.
  2. Venables, Anthony J, 1993. "Equilibrium Locations of Vertically Linked Industries," CEPR Discussion Papers 802, C.E.P.R. Discussion Papers.
  3. Andersson, Fredrik & Forslid, Rikard, 1999. "Tax Competition and Economic Geography," CEPR Discussion Papers 2220, C.E.P.R. Discussion Papers.
  4. Spence, Michael, 1976. "Product Selection, Fixed Costs, and Monopolistic Competition," Review of Economic Studies, Wiley Blackwell, vol. 43(2), pages 217-35, June.
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