Trade Reforms and Technological Accumulation: the Case of the Industrial Sector in Argentina during the 1990s

The impacts of trade liberalisation on technological development are particularly important because of their dynamic long-term effects on the economy. The paper pursues a comprehensive approach to technological change that relies on drawing a contrast between visible changes in performance and decision-making processes that stem from a behavioural dimension. Based on the Argentinean Innovation Survey (1997) the paper justifies the importance of a joint determination of these two dimensions for analysing macro-micro links of technological change as the most adequate way of assessing the impact of major macro-policy change on technology. It is organised in three parts. The first part critically discusses the main theoretical arguments that relate trade liberalisation to technological accumulation. The second part claims that the ultimate impact of openness on technological performance is dependent on its incidence on the elements that guide firms' technological decisions. Therefore, a model for micro technological behaviour and trade liberalisation is developed in the light of the Schumpeterian literature and illustrated using techniques appropriate for non-parametric data. Part three emphasises the importance of macro behaviour. Based on empirical information for the Argentinean case it is claimed that the biological metaphor which states that an open market is sufficient to select the best performing firms is often invalid in the context of Argentinean macro behaviour during the 1990s. On the contrary, firms had higher probabilities of remaining in the market when they followed a survival attitude unrelated to productive activities, and this often hampered technological performance. Thus two distinct patterns emerged, one corresponding to technological performance and the other to economic performance.