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R&D, Openness, and Growth


  • Pei-Pei Chen

    () (Department of Economics, University of Pretoria)

  • Rangan Gupta

    () (Department of Economics, University of Pretoria)


Recent studies have pointed out that trade liberalisation leads to technological spillovers, which, in turn, tend to improve the efficiency of the domestic Research and Development (R&D) sector, and ultimately boost economic growth. In this paper, we theoretically formalize the above mentioned relationship between trade openness and growth via technological and knowledge spill over in the R&D sector. We show that, under certain conditions, an increase in the degree of openness is not only growth enhancing, but also improves the standard of living. The study, thus, prescribe policies of developing and improving the domestic R&D sector in order to reap the full benefits of trade liberalisation.

Suggested Citation

  • Pei-Pei Chen & Rangan Gupta, 2006. "R&D, Openness, and Growth," Working Papers 200623, University of Pretoria, Department of Economics.
  • Handle: RePEc:pre:wpaper:200623

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    More about this item


    Trade Openness; Growth; Research and Development;

    JEL classification:

    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • O32 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Management of Technological Innovation and R&D
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models


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