1 Vertical Innovation and Catching Up: Implications for Trade and Growth (original) (raw)
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We consider a technologically backward country and analyse the implications on competitiveness and long-run growth of the quality content of traded goods. We build an endogenous growth model where quality improvements stem from research activity taking place in the R&D sector, and where the relative quality content of goods matter for export and import demand functions. We show that the
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This paper analyses two significant and to date open issues regarding the role of trade as a channel for international technology spillovers. The first refers to its relative impact on growth in comparison to that of own R&D spending. The second has to do with the importance of the technological gap to take advantage of foreign technology. For this purpose we estimate a version of the growth model proposed by , which includes some modifications to better capture the technology di usion process. Our results first suggest that domestic R&D and human capital stocks are critical for foreign technology adoption. Secondly, they indicate that richer countries are more successful in taking advantage of international technology spillovers.
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How large are the welfare gains from trade? Would such gains be significantly amplified in the long run when productivity is endogenously enhanced? To address these questions, we focus on the dynamic effect of trade, in particular, how trade affects the incentives for technological advancement. We construct an innovation-based endogenous growth model of North-South trade. There are two types of innovation: one by the North to upgrade the general purpose technology (GPT) and another by all countries to advance entrepreneurial knowledge for developing differentiated products. We find sizable welfare gains from trade, about 5.3% when compared to autarky. The gains in our dynamic model are much higher than the static estimates where the effects of GPT-driven innovation are eliminated. The share of dynamic gains from trade is about 78% of the total gains in our benchmark economy-much higher than comparable figures identified in previous studies. Comparative statics indicate that GPT innovation efficacy, entrepreneurial talent distribution and trade elasticity are crucial for dynamic gains from trade.
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This paper explores the role of imports as a mechanism of transmission of international technological spillovers and the significance of these for the growth and economic convergence of the OECD countries. For this purpose a growth model is estimated that includes amongst its determinants a measure of the stock of technological knowledge. The results reveal first that international technological spillovers transmitted through imports have had a favourable influence on the economic growth of the OECD countries, Secondly, they suggest that the capacity of countries to take advantage of those spillovers depend on their own human and R&D capital endowments.
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Economics Letters, 2004
Recently, evidence has emerged that knowledge produced through R&D in developed countries can spill over through trade to other countries. The literature has concentrated on imports as the transmission channel. We examine whether exports are also a channel on a panel of 21 countries for 1975 -1990. We find that both are sources of knowledge spillovers. D
Metroeconomica, 2017
We investigate the impacts on the skill premium and on economic growth in an innovator-imitator general equilibrium growth model assuming: (a) directed technological change; (b) international trade of intermediate goods; (c) internal costly investment in both physical capital and R&D; and (d) complementarities between intermediate goods in aggregate production. With trade of intermediate goods, the complementarities degree and investment costs influence the economic growth of both countries, but do not affect the countries' skill premia, which are directed by technological knowledge. Additionally, in agreement with related empirical literature, openness to trade of intermediate goods leads to a higher equilibrium skill premium in both countries, whereas its impact on the common growth rate can vary in sign.
Technological Catching Up, Quality of Exports, and Competitiveness: A Sectoral Perspective
Emerging Markets Finance and Trade, 2013
In the paper we focus on emerging market economies' pattern of trade, with a view to explaining the different features of competitiveness for high skill-and low skill-intensive firms. We consider a theoretical dynamical setup where high-skill firms engage in innovation activity and gain market shares in high-income "quality dominated" markets thanks to technological catching up, whereas low-skill firms face price competition for their exports. On the basis of the theoretical model, we run econometric estimations for trade between CEECs and EU economies over the period 2000-2007. In the econometric analysis we first test the assumption that UVR is an adequate indicator of quality in trade, showing that in high skill-intensive firms it is systematically correlated to domestic and foreign technological variables; we then use the fitted UVR in the estimation of the role of preference for quality in the evolution of CEECs' market shares. The estimations support the results of the theoretical model as to the role of non-price competitiveness stemming from quality-supply as well as quality-demand factors.
We consider the interaction of trade and technology di¤usion in a two-region model of innovation and imitation. We …nd that globalization, either in the form of lower trade barriers or in faster di¤usion of technology between innovator and imitator spurs innovation, bene…ting both regions.