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The Linkages between Open Services Markets and Technology Transfer

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Abstract

Services are the main drivers of economic growth in OECD countries and they are becoming increasingly innovative. This study analyses the role of open services markets in the transfer and diffusion of technology from developed countries to developing countries. It first explores how trade in services increases exposure to foreign technologies. The four modes of supply of services, as defined in the General Agreement on Trade in Services (GATS), are closely interlinked with the main channel of technology diffusion identified in the economic literature. The report then investigates how open services markets can reduce the cost of technology transfer and help to build better absorptive capacities in five sectors (business services, telecommunications, financial services, higher education and training, and logistics services). The last part of the study highlights the productivity gains from services trade liberalisation and the technological spillovers inside the receiving economy. The report shows that emphasis should be placed on services in the debate on trade and growth and that services liberalisation in key sectors, which facilitate the exchange of knowledge between foreign and domestic companies, can have a significant impact on technology diffusion.

Suggested Citation

  • Oecd, 2006. "The Linkages between Open Services Markets and Technology Transfer," OECD Trade Policy Papers 29, OECD Publishing.
  • Handle: RePEc:oec:traaab:29-en
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    File URL: http://dx.doi.org/10.1787/723726052723
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    Cited by:

    1. Ranjan Dash & P. Parida, 2013. "FDI, services trade and economic growth in India: empirical evidence on causal links," Empirical Economics, Springer, vol. 45(1), pages 217-238, August.
    2. Fernandes, Ana M. & Paunov, Caroline, 2012. "Foreign direct investment in services and manufacturing productivity: Evidence for Chile," Journal of Development Economics, Elsevier, vol. 97(2), pages 305-321.
    3. Magnus Lodefalk, 2014. "The role of services for manufacturing firm exports," Review of World Economics (Weltwirtschaftliches Archiv), Springer;Institut für Weltwirtschaft (Kiel Institute for the World Economy), vol. 150(1), pages 59-82, February.

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    Keywords

    growth; linkages; open markets; productivity; services; spillovers; technology; technology diffusion; technology transfer; trade liberalisation;

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