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North-South Technology Spillovers: The Relative Impact of Openness and Foreign R&D

  • Schiff, Maurice

    ()

    (World Bank)

  • Wang, Yanling

    ()

    (Carleton University)

This paper examines the relative contribution of openness and the R&D content of trade to TFP growth for North-South trade-related technology diffusion. The measure of foreign R&D used in the literature on trade-related technology diffusion imposes identical contributions of openness and the R&D content of trade to TFP. We allow these contributions to differ and show that openness has a greater impact on TFP growth than R&D. These results imply that the impact of openness on TFP in developing countries is larger than previously obtained in this literature. In other words, developing countries can obtain larger productivity gains from trade liberalization than previously thought.

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File URL: http://ftp.iza.org/dp3383.pdf
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Paper provided by Institute for the Study of Labor (IZA) in its series IZA Discussion Papers with number 3383.

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Length: 17 pages
Date of creation: Mar 2008
Date of revision:
Publication status: published in International Economic Journal, 2010, 24 (2), 159-69
Handle: RePEc:iza:izadps:dp3383
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  1. Coe, David T. & Helpman, Elhanan, 1995. "International R&D spillovers," European Economic Review, Elsevier, vol. 39(5), pages 859-887, May.
  2. David Greenaway & Neil Foster & Rod Falvey, 2002. "North-South Trade, Knowledge Spillovers and Growth," European Economy Group Working Papers 15, European Economy Group.
  3. Coe, David T & Helpman, Elhanan & Hoffmaister, Alexander W, 1997. "North-South R&D Spillovers," Economic Journal, Royal Economic Society, vol. 107(440), pages 134-49, January.
  4. Lumenga-Neso, Olivier & Olarreaga, Marcelo & Schiff, Maurice, 2005. "On `indirect' trade-related R&D spillovers," European Economic Review, Elsevier, vol. 49(7), pages 1785-1798, October.
  5. Rodolfo E. Manuelli & Ananth Seshadri, 2013. "Frictionless technology diffusion: the case of tractors," Working Papers 2013-022, Federal Reserve Bank of St. Louis.
  6. Greenwood, J., 1996. "The Third Industrial Revolution," RCER Working Papers 435, University of Rochester - Center for Economic Research (RCER).
  7. Schiff, Maurice & Wang, Yanling & Olarreaga, Marcelo, 2002. "Trade-related technology diffusion and the dynamics of North-South and South-South integration," Policy Research Working Paper Series 2861, The World Bank.
  8. Paul M Romer, 1999. "Increasing Returns and Long-Run Growth," Levine's Working Paper Archive 2232, David K. Levine.
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