Hostname: page-component-77c89778f8-gq7q9 Total loading time: 0 Render date: 2024-07-19T11:36:28.510Z Has data issue: false hasContentIssue false
  • English
  • Français

North–South Trade-Related Technology Diffusion and the East Asia–Latin America Productivity Gap

Published online by Cambridge University Press:  05 September 2023

Maurice Schiff  and
Yanling Wang
Maurice Schiff*
Affiliation:
IZA Institute of Labor Economics, 3299 K Street, NW, Washington, DC 20007, USA
Yanling Wang
Affiliation:
Norman Paterson School of International Affairs, Carleton University, 5306 River Building, 1125 Colonel-By-Drive, Ottawa, Ontario, Canada K1S 5B6
*
Corresponding author: Maurice Shiff, Email: schiffmauricewilly@gmail.com
Get access Rights & Permissions [Opens in a new window]

Abstract

This paper examines the impact of trade-related technology diffusion from G7 countries to Latin America and East Asia on total factor productivity controlling for education, governance, and distance. We build on the trade and distance-focused strands of the technology diffusion literature and find that (i) total factor productivity (TFP) increases with education, trade, and governance (ETG) and declines with distance to the G7 countries; (ii) increasing Latin America's ETG to East Asia's level would double TFP, accounting for about 75% of the TFP gap between the two country groups; and (iii) South America's greater remoteness relative to Mexico's from the US and Canada significantly reduces its TFP and similarly for Singapore's greater remoteness from Japan relative to Hong Kong.

Keywords

F10O19O33O40North–South tradetechnology diffusionEast AsiaLatin AmericaproductivityTFPdistance
Type
Original Article
Information
World Trade Review , Volume 22 , Special Issue 3-4: Double Special Issue: Trade Policy, Openness, and Development in Honour of L. Alan Winters , October 2023 , pp. 348 - 358
Copyright
Copyright © The Author(s), 2023. Published by Cambridge University Press on behalf of The World Trade Organization

Access options

Get access to the full version of this content by using one of the access options below. (Log in options will check for institutional or personal access. Content may require purchase if you do not have access.)

References

Barro, R.J. and J.W. Lee (2013) ‘A New Data Set of Educational Attainment in the World, 1950-2010’, Journal of Development Economics 104, 184–198.CrossRefGoogle Scholar
Coe, D.T. and Helpman, E. (1995) ‘International R&D Spillovers’, European Economic Review 39(5), 859–887.CrossRefGoogle Scholar
Coe, D.T., Helpman, E., and Hoffmaister, A.W. (1997) ‘North–South R&D Spillovers’, Economic Journal 107, 134–149.CrossRefGoogle Scholar
Coe, D.T., Helpman, E., and Hoffmaister, A.W.. (2008) ‘International R&D Spillovers and Institutions’, Working Paper 08/104. Washington, DC: IMF.CrossRefGoogle Scholar
Cole, H.L., Ohanian, L.E., Riascos, A., and Schmidt, J.A. (2005) ‘Latin America in the Rearview Mirror’, Journal of Monetary Economics 52, 69–107.CrossRefGoogle Scholar
Falvey, R., Foster, N., and Greenaway, D.. (2002) ‘North–South Trade, Knowledge Spillovers and Growth’, Research Paper No. 2002/23. Leverhulme Centre for Research on Globalisation and Economic Policy, University of Nottingham.Google Scholar
Hulten, C.R. (1975) ‘Technical Change and the Reproducibility of Capital’, American Economic Review 65(5), 956–965.Google Scholar
Kaufmann, D., Kraay, A., and Mastruzzi, M. (2011) Worldwide Governance Indicators. The Worldwide Governance Indicators project, World Bank, Washington, DC.Google Scholar
Keller, W. (1998) ‘Are international R&D spillovers trade-related? Analyzing spillovers among randomly matched trade partners’, European Economic Review 48, 1469–1481.CrossRefGoogle Scholar
Keller, W. (2002) ‘Geographic Localization of International Technology Diffusion’, American Economic Review 92(1), 120–142.CrossRefGoogle Scholar
Kydland, F. and Zarazaga, C. (2002) ‘Argentina's Lost Decade’, Review of Economic Dynamics 5(1), 152–165.CrossRefGoogle Scholar
Lumenga-Neso, O., M., Olarreaga, and M., Schiff (2005) ‘On “Indirect” trade-related R&D spillovers’, European Economic Review 49, 1785–1798CrossRefGoogle Scholar
Nicita, A. and Olarreaga, M. (2007) ‘Trade, Production and Protection 1976–2004’, World Bank Economic Review 21(1), 165–171.CrossRefGoogle Scholar
Schiff, M. and Wang, Y. (2006) ‘North–South and South–South Trade-Related Technology Diffusion: An Industry-Level Analysis of Direct and Indirect Effects’, Canadian Journal of Economics 39(3), 831–844.CrossRefGoogle Scholar
Schiff, M. and Wang, Y. (2008) ‘North–South and South–South Trade-Related Technology Diffusion: How Important are They in Improving Productivity Growth?’, Journal of Development Studies 44(1), 49–59.CrossRefGoogle Scholar
Storper, M. and Venables, A.J. (2004) ‘Buzz: Face-to-Face Contact and the Urban Economy’, Journal of Economic Geography 4(4), 351–370.CrossRefGoogle Scholar
World Bank (2011) Latin America and the Caribbean's Long-Term Growth: Made in China? Office of the Chief Economist, Latin America and Caribbean. Washington, DC: World BankGoogle Scholar
Young, A. (1995) ‘The Tyranny of Numbers: Confronting the Statistical Realities of the East Asian Growth Experience’, The Quarterly Journal of Economics 110(3): 641–680. https://doi.org/10.2307/2946695.CrossRefGoogle Scholar
Zhu, L. and Jeon, B. (2007) ‘International R&D Spillovers: Trade, FDI, and Information Technology as Spillover Channels’, Review of International Economics 15(5), 955–973.CrossRefGoogle Scholar