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Foreign technology imports and economic growth in developing countries

  • Xiaoming Zhang
  • Heng-fu Zou

The authors investigate the relationship between foreign technology imports and economic growth in developing countries. They develop an intertemporal endogenous growth model that explicitly accepts foreign technology imports as a factor of production. The model establishes a link between the growth rate of productivity in a developing country and the country's intensity of learning to use foreign technologies. They hypothesize that a developing country's economic growth rate increases as foreign technology imports increase. They run regressions with data for about 50 developing countries, using different econometric methods and time spans. These empirical tests confirm the hypothesis that foreign technology transfers boost income growth rates. Moreover, economic developing in developing countries differs from that in industrial countries. In developing countries, increases in productivity depend not on innovation but on importing foreign plants and equipment and on borrowing foreign technology.

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Paper provided by The World Bank in its series Policy Research Working Paper Series with number 1412.

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Date of creation: 31 Jan 1995
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Handle: RePEc:wbk:wbrwps:1412
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  1. Larry E. Jones & Rodolfo Manuelli, 1990. "A Convex Model of Equilibrium Growth," NBER Working Papers 3241, National Bureau of Economic Research, Inc.
  2. Balassa, Bela, 1978. "Exports and economic growth : Further evidence," Journal of Development Economics, Elsevier, vol. 5(2), pages 181-189, June.
  3. Romer, Paul M, 1986. "Increasing Returns and Long-run Growth," Journal of Political Economy, University of Chicago Press, vol. 94(5), pages 1002-37, October.
  4. Heng-fu Zou, 1996. "Exports, Foreign Technology Imports, and Long-run Growth," CEMA Working Papers 477, China Economics and Management Academy, Central University of Finance and Economics.
  5. Heng-fu Zou, 2005. "Product Innovation, Capital Accumulation, and Endogenous Growth," CEMA Working Papers 191, China Economics and Management Academy, Central University of Finance and Economics.
  6. N. Gregory Mankiw & David Romer & David N. Weil, 1990. "A Contribution to the Empirics of Economic Growth," NBER Working Papers 3541, National Bureau of Economic Research, Inc.
  7. Benhabib, Jess & Spiegel, Mark M., 1994. "The role of human capital in economic development evidence from aggregate cross-country data," Journal of Monetary Economics, Elsevier, vol. 34(2), pages 143-173, October.
  8. Islam, Nazrul, 1995. "Growth Empirics: A Panel Data Approach," The Quarterly Journal of Economics, MIT Press, vol. 110(4), pages 1127-70, November.
  9. de Melo, Jaime & Robinson, Sherman, 1990. "Productivity and externalities : models of export led growth," Policy Research Working Paper Series 387, The World Bank.
  10. Esfahani, Hadi Salehi, 1991. "Exports, imports, and economic growth in semi-industrialized countries," Journal of Development Economics, Elsevier, vol. 35(1), pages 93-116, January.
  11. Summers, Robert & Heston, Alan, 1991. "The Penn World Table (Mark 5): An Expanded Set of International Comparisons, 1950-1988," The Quarterly Journal of Economics, MIT Press, vol. 106(2), pages 327-68, May.
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