North-South Trade-Related Technology Diffusion : Virtuous Growth Cycles in Latin America
This paper examines the impact on total factor productivity in Latin America and the Caribbean (LAC) and in other developing countries of trade-related technology diffusion from the North) (denoted by NRD), education, and governance, research and d...
| Main Authors: | , |
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| Format: | Policy Research Working Paper |
| Language: | English |
| Published: |
2012
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| Subjects: | |
| Online Access: | http://www-wds.worldbank.org/external/default/main?menuPK=64187510&pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000158349_20100510092815 http://hdl.handle.net/10986/3786 |
| Summary: | This paper examines the impact on total
factor productivity in Latin America and the Caribbean (LAC)
and in other developing countries of trade-related
technology diffusion from the North) (denoted by NRD),
education, and governance, research and development The NRD
value for a developing country is an average of R&D
stocks in the North, with weights related to openness with
the North. Industry-specific NRD is based on the North s
industry-specific R&D, North-South trade patterns, and
input-output relations in the South. The main findings are:
i) the impact of education and governance on TFP is
significantly larger in LAC than in other developing
countries, while the opposite holds for NRD; and ii)
education, governance and NRD have additional effects on TFP
in LAC s R&D-intensive industries through their
interaction with either or both of the other two variables;
and iii) since NRD increases with openness and with R&D
in the North, both variables raise the South's TFP
directly as well as through their interaction with education
and governance. These interaction effects imply that
increasing the level of any of the three policy variables --
education, governance, or openness --results in virtuous
growth cycles. These are smallest under an increase in one
of these variables, stronger under an increase in two of
them and strongest under an increase in all three variables. |
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