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On the Role of Technical Cooperation in International Technology Transfers

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  • SAWADA Yasuyuki
  • MATSUDA Ayako
  • KIMURA Hidemi

Abstract

We investigate whether and how technical cooperation aid (TC) facilitates technological diffusion from developed to developing countries, comparing it with foreign direct investment (FDI) and external openness. Extending the model of Benhabib and Spiegel (2005), we estimate the degree to which these three channels contribute to countries total factor productivity (TFP) growth rates. Our econometric model also allows us to identify whether a country will catch up to or diverge from the technological leader nation over time. Two sets of robust findings emerge. First, TC, FDI and openness all contribute to facilitate international technology transfers. Yet, among these three channels, openness seems to contribute the most, followed by TC. Also, TC seems to compensate for the lack of sufficient human capital in developing countries. Second, around 6 to 17 countries out of 85 in our sample fail to catch up to the technological leader over the 36 years. These results suggest that TC can play an important role in facilitating the technological catch up of developing countries.

Suggested Citation

  • SAWADA Yasuyuki & MATSUDA Ayako & KIMURA Hidemi, 2007. "On the Role of Technical Cooperation in International Technology Transfers," Discussion papers 07045, Research Institute of Economy, Trade and Industry (RIETI).
  • Handle: RePEc:eti:dpaper:07045
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    3. Ruerd Ruben, 2012. "Dimensionner l'aide au développement : ce que nous enseigne l'évaluation. Dimensioning Development Aid: Some Lessons from Evaluation," Revue d’économie du développement, De Boeck Université, vol. 20(4), pages 95-123.
    4. Christopher Boudreaux & Anand Jha & Monica Escaleras, 2021. "Weathering the Storm: How Foreign Aid and Institutions Affect Entrepreneurship Following Natural Disasters," Papers 2104.12008, arXiv.org.
    5. Ramani, Shyama V. & Urias, Eduardo, 2018. "When access to drugs meets catch-up: Insights from the use of CL threats to improve access to ARV drugs in Brazil," Research Policy, Elsevier, vol. 47(8), pages 1538-1552.

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