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Technology Trade in Economic Development

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Recent evidence on the respective contributions of institutions and trade to income levels across countries has demonstrated that – once endogeneity is considered – institutional quality clearly dominates the effect of trade. We argue that overall trade is not the most appropriate measure for technology diffusion as a source of productivity growth and propose to focus on imports of research and development (R&D) intensive goods instead. Overall, we confirm previous findings that institutions matter most and that overall trade is not positively associated with per-capita income levels. Yet this does not hold for technology trade, as there is a positive and significant linkage between technology imports and income levels. This outcome is robust to various model specifications, including an instrumental variable approach.

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  • Matthias Busse & José Luis Groizard, 2006. "Technology Trade in Economic Development," DEA Working Papers 22, Universitat de les Illes Balears, Departament d'Economía Aplicada.
  • Handle: RePEc:ubi:deawps:22
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    Cited by:

    1. Krammer, Sorin M.S., 2014. "Assessing the relative importance of multiple channels for embodied and disembodied technological spillovers," Technological Forecasting and Social Change, Elsevier, vol. 81(C), pages 272-286.
    2. Herrerias, M.J. & Orts, Vicente, 2011. "Imports and growth in China," Economic Modelling, Elsevier, vol. 28(6), pages 2811-2819.
    3. Jose Groizard, 2009. "Technology Trade," Journal of Development Studies, Taylor & Francis Journals, vol. 45(9), pages 1526-1544.
    4. Andrea Fracasso & Giuseppe Vittucci Marzetti, 2013. "An empirical note on international R&D spillovers," Empirical Economics, Springer, vol. 45(1), pages 179-191, August.
    5. Herrerias, M.J. & Orts, Vicente, 2013. "Capital goods imports and long-run growth: Is the Chinese experience relevant to developing countries?," Journal of Policy Modeling, Elsevier, vol. 35(5), pages 781-797.
    6. Mellati, Ali, 2008. "Technology, Trade Specialization and Development: Jumping to Technology Development Era," MPRA Paper 26643, University Library of Munich, Germany.

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    Keywords

    Growth; Technology Diffusion; Trade; R&D Spillovers.;

    JEL classification:

    • F10 - International Economics - - Trade - - - General
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O40 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - General

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