Weightless Machines and Costless Knowledge : An Empirical Analysis of Trade and Technology Diffusion
The authors examine the impact on productivity of technologies imported by a sample of developing, and transition economies in Central and Easter Europe, and the Southern Mediterranean - economies becoming increasingly integrated with the European...
| Main Authors: | , |
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| Format: | Policy Research Working Paper |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2014
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| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/2001/05/1121279/weightless-machines-costless-knowledge-empirical-analysis-trade-technology-diffusion http://hdl.handle.net/10986/19654 |
| Summary: | The authors examine the impact on
productivity of technologies imported by a sample of
developing, and transition economies in Central and Easter
Europe, and the Southern Mediterranean - economies becoming
increasingly integrated with the European Union. They depart
from earlier studies of technology diffusion by focusing on
the technology embodied in the machines imported. Earlier
work focused mostly on spillovers from foreign research, and
development conveyed through trade, without controlling for
the characteristics of the goods imported. The authors
jointly estimate the choice of foreign technology, and its
impact on domestic productivity for a set of manufacturing
sectors. They proxy the technological level of the machines
imported, by using an index relating the unit value of the
machines imported by a given country, to the unit value of
similar machines imported by the United States. At any point
in time between 1989 and 1997, there is a persistent (even
increasing) gap between the unit values of the machines
imported by the United States, and those imported by the
sample of developing countries. Although developing
economies buy increasingly productive machines, the
technology embodied in the machines persistently lags behind
that in the machines purchased by the United States - so far
as unit values are good proxies of embodied technologies.
The authors also find that productivity growth in
manufacturing, depends on the types of machines imported in
a given industry. So although the optimal choice for
developing countries is to buy cheaper, less sophisticated
machines, given local skills and factor prices, this choice
has a cost in long-run productivity growth. If productivity
is low, countries buy low-technology machines, but doing so
keeps them in a low-technology, low-growth trap. |
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