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North-South Trade-related Technology Diffusion, Brain Drain and Productivity Growth: Are Small States Different?

  • Schiff, Maurice

    ()

    (The World Bank)

  • Wang, Yanling

    ()

    (Carleton Universit)

The economies of small developing states tend to be more fragile than those of large ones. This paper examines this issue in a dynamic context by focusing on the impact of the brain drain on North-South trade-related technology diffusion and total factor productivity growth in small and large states in the South. There are three main findings. First, productivity growth increases with North-South trade-related technology diffusion and education and the interaction between the two, and decreases with the brain drain. Second, the impact of North-South trade-related technology diffusion, education, and their interaction on productivity growth in small states is more than three times that for large countries, with the negative impact of the brain drain thus more than three times greater in small than in large states. And third, the greater loss in productivity growth in small states has two brain drain-related causes: a substantially greater sensitivity of productivity growth to the brain drain, and brain drain levels that are more than five times greater in small than in large states.

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Paper provided by The World Bank in its series Policy Research Working Paper Series with number 4828.

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Length: 23 pages
Date of creation: 01 Jan 2009
Date of revision:
Handle: RePEc:wbk:wbrwps:4828
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  1. David Greenaway & Neil Foster & Rod Falvey, 2002. "North-South Trade, Knowledge Spillovers and Growth," European Economy Group Working Papers 15, European Economy Group.
  2. 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.
  3. Maurice Schiff & Yanling Wang, 2008. "North-South and South-South Trade-Related Technology Diffusion: How Important Are They in Improving TFP Growth?," Journal of Development Studies, Taylor & Francis Journals, vol. 44(1), pages 49-59.
  4. Maurice Schiff & Yanling Wang, 2006. "North-South and South-South trade-related technology diffusion: an industry-level analysis of direct and indirect effects," Canadian Journal of Economics, Canadian Economics Association, vol. 39(3), pages 831-844, August.
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