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Technology adoption and factor proportions in open economies : theory and evidence from the global computer industry

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  • Cusolito , Ana P.
  • Lederman, Daniel

Abstract

Theories of international trade assume that all countries use similar and exogenous technologies in the production of any good. This paper relaxes this assumption. The marriage of literatures on biased technical change and trade yields a tractable theory, which predicts that differences in factor endowments and intellectual property rights bias technical change toward particular factor intensities, and thus unit factor input requirements can vary across economies. Using data on net exports of a single industry, computers, intellectual property rights and factor endowments for 73 countries during 1980-2000, the paper shows that once technological choices are considered, countries with different factor endowments can become net exporters of the same product.

Suggested Citation

  • Cusolito , Ana P. & Lederman, Daniel, 2009. "Technology adoption and factor proportions in open economies : theory and evidence from the global computer industry," Policy Research Working Paper Series 5043, The World Bank.
  • Handle: RePEc:wbk:wbrwps:5043
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    References listed on IDEAS

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    Keywords

    Technology Industry; Economic Theory&Research; ICT Policy and Strategies; E-Business; Labor Policies;

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