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Trade-related technology diffusion and the dynamics of North-South and South-South integration

  • Schiff, Maurice
  • Wang, Yanling
  • Olarreaga, Marcelo

This paper examines the impact on total factor productivity of North-South and South-South trade-related research and development (R&D) spillovers. It is the first to do so at the industry level for developing countries. North-South and South-South R&D flows are constructed based on industry-specific R&D in the North, North-South and South-South trade patterns, and input-output relations in the South. The main findings are: 1) North-South and South-South R&D flows have a positive impact on total factor productivity, though the former is larger. 2) R&D-intensive industries benefit mainly from North-South R&D flows while low R&D-intensive industries benefit mainly from South-South R&D flows. These results have implications for dynamic comparative advantage and for the dynamics of North-South and South-South regional integration.

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Paper provided by The World Bank in its series Policy Research Working Paper Series with number 2861.

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Date of creation: 30 Jun 2002
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Handle: RePEc:wbk:wbrwps:2861
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  1. Grossman, G.M. & Helpman, E., 1988. "Comparative Advantage And Long-Run Growth," Papers 39-88, Tel Aviv.
  2. Wolfgang Keller, 1996. "Are International R&D Spillovers Trade-related? Analyzing Spillovers among Randomly Matched Trade Partners," International Trade 9608002, EconWPA.
  3. Coe, David T & Helpman, Elhanan, 1993. "International R&D Spillovers," CEPR Discussion Papers 840, C.E.P.R. Discussion Papers.
  4. 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.
  5. Lucas, Robert Jr., 1988. "On the mechanics of economic development," Journal of Monetary Economics, Elsevier, vol. 22(1), pages 3-42, July.
  6. Eaton, Jonathan & Kortum, Samuel, 1999. "International Technology Diffusion: Theory and Measurement," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 40(3), pages 537-70, August.
  7. Lumenga-Neso, Olivier & Olarreaga, Marcelo & Schiff, Maurice, 2001. "On"indirect"trade-related research and development spillovers," Policy Research Working Paper Series 2580, The World Bank.
  8. Krugman, Paul, 1987. "The narrow moving band, the Dutch disease, and the competitive consequences of Mrs. Thatcher : Notes on trade in the presence of dynamic scale economies," Journal of Development Economics, Elsevier, vol. 27(1-2), pages 41-55, October.
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