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Technology Trade, Productivity and Growth

  • Jose L. Groizard


International trade is a major channel for technology diffusion. However regressing trade in R&D intensive goods to evaluate the effect of technology imports on productivity in a cross section of countries may be misleading because of simultaneity bias. I identify the effect of technology trade on productivity using geographical instruments for the trade variable as in Frankel and Romer (1999). I make several contributions. First, I provide evidence that OLS estimates are downward biased. Second, the effect is robust to the exclusion of outliers, the inclusion of latitude, and to different subsamples. Finally, I document the channels throughout technology imports affect productivity.

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Paper provided by Universitat de les Illes Balears, Departament d'Economía Aplicada in its series DEA Working Papers with number 4.

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Date of creation: Nov 2003
Date of revision:
Handle: RePEc:ubi:deawps:4
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  1. repec:tpr:qjecon:v:116:y:2001:i:2:p:563-606 is not listed on IDEAS
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  10. Paul M Romer, 1999. "Endogenous Technological Change," Levine's Working Paper Archive 2135, David K. Levine.
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  20. Rodrik, Rani, 1995. "Trade and industrial policy reform," Handbook of Development Economics, in: Hollis Chenery & T.N. Srinivasan (ed.), Handbook of Development Economics, edition 1, volume 3, chapter 45, pages 2925-2982 Elsevier.
  21. David H. Romer & Jeffrey A. Frankel, 1999. "Does Trade Cause Growth?," American Economic Review, American Economic Association, vol. 89(3), pages 379-399, June.
  22. Jorge Crespo & Carmela Martin & Francisco Javier Velázquez, 2002. "International technology diffusion through imports and its impact on economic growth," European Economy Group Working Papers 12, European Economy Group.
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