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The international diffusion of new technologies: a multi-technology analysis of latecomer advantage and global economic integration

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  • Richard Perkins
  • Eric Neumayer

Abstract

The diffusion of modern, efficient technology has far-reaching consequences for the geography of economic activity, inequality and environmental quality. This article examines two popular yet highly controversial claims about the conditions most favorable to the rapid spread of new technology. The first states that latecomer advantage allows developing countries to diffuse new technology faster than developed countries. The second claim, widely articulated by advocates of neo-liberal policy reform, is that new technologies diffuse more rapidly where countries are “open” to international trade and investment. To investigate these claims we use event-history analysis to estimate the determinants of diffusion speed across a large panel of developed and developing countries for three very different technologies. These are: continuous steel casting, shuttleless textile weaving looms and digital telephone mainlines. Our results broadly support both propositions. Countries which adopt new technology later or have a smaller existing capital stock – characteristic features of developing countries – diffuse new technology more rapidly than countries that adopt earlier or have more installed capacity – two characteristics of developed countries. Trade openness is also found to influence the rate of diffusion positively for all three technologies. Yet, consistent with recent empirical studies, we fail to find support for the idea that foreign direct investment (FDI) accelerates the diffusion of new technology in host economies. The paper concludes by discussing the geographical implications of our findings.

Suggested Citation

  • Richard Perkins & Eric Neumayer, 2004. "The international diffusion of new technologies: a multi-technology analysis of latecomer advantage and global economic integration," Development and Comp Systems 0407001, EconWPA, revised 08 Dec 2004.
  • Handle: RePEc:wpa:wuwpdc:0407001 Note: Type of Document -
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    Cited by:

    1. Indra de Soysa & Eric Neumayer, 2004. "False Prophet, or Genuine Savior? Assessing the Effects of Economic Openness on Sustainable Development, 1980–1999," International Trade 0409001, EconWPA, revised 13 Oct 2004.
    2. Peters, Kay & Albers, Sönke & Kumar, V., 2008. "Is there more to international Diffusion than Culture? An investigation on the Role of Marketing and Industry Variables," EconStor Preprints 27678, ZBW - German National Library of Economics.
    3. Mocnik, Dijana & Sirec, Karin, 2010. "The determinants of Internet use controlling for income level: Cross-country empirical evidence," Information Economics and Policy, Elsevier, vol. 22(3), pages 243-256, July.
    4. Kingsley E. Haynes & Lei Ding, 2006. "Technology, Innovation and Latecomer Strategies: Evidence from the Mobile Handset Manufacturing Sector in China," ERSA conference papers ersa06p17, European Regional Science Association.

    More about this item

    Keywords

    Diffusion; globalization; industrialization; latecomer; technology;

    JEL classification:

    • O - Economic Development, Innovation, Technological Change, and Growth
    • P - Economic Systems

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