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Trade Liberalization, Democratization and Technology Adoption


  • Cervellati, Matteo

    () (University of Bologna)

  • Naghavi, Alireza

    () (University of Bologna)

  • Toubal, Farid

    () (ENS de Cachan)


We study the role of trade liberalization, democratization and their interaction for technology adoption. A general equilibrium theory with heterogeneous skills predicts a complementarity between trade and political regimes. Openness should accelerate technology adoption if coupled with democratization but may lead to a slow down if these regime changes are imbalanced. We use panel data on technology adoption at the sectoral level for the period 1980-2000 by exploiting within country variation and the heterogenous timing of openness and democratization. The results document the existence of robust positive interactions between these institutional changes for technology adoption and productivity growth.

Suggested Citation

  • Cervellati, Matteo & Naghavi, Alireza & Toubal, Farid, 2013. "Trade Liberalization, Democratization and Technology Adoption," IZA Discussion Papers 7132, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp7132

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    References listed on IDEAS

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    Cited by:

    1. Michiel Gerritse, 2015. "Does trade cause long-run development? Theory and evidence from countries behind the Suez channel," ERSA conference papers ersa15p1100, European Regional Science Association.

    More about this item


    trade openness; democratization; political economy theory; technology adoption; sector level panel data; cross-country analysis;

    JEL classification:

    • F16 - International Economics - - Trade - - - Trade and Labor Market Interactions
    • J24 - Labor and Demographic Economics - - Demand and Supply of Labor - - - Human Capital; Skills; Occupational Choice; Labor Productivity
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • P51 - Economic Systems - - Comparative Economic Systems - - - Comparative Analysis of Economic Systems
    • F59 - International Economics - - International Relations, National Security, and International Political Economy - - - Other

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