IDEAS home Printed from https://ideas.repec.org/p/wii/wpaper/139.html
   My bibliography  Save this paper

Trade in Services versus Trade in Manufactures: The Relation between the Role of Tacit Knowledge, the Scope for Catch up, and Income Elasticity

Author

Listed:
  • Eddy Bekkers

    (The Vienna Institute for International Economic Studies, wiiw)

  • Michael Landesmann

    (The Vienna Institute for International Economic Studies, wiiw)

  • Indre Macskasi

Abstract

We infer sectoral productivity from trade and production data and test the hypothesis that technological catch-up is slower in tacit knowledge intensive sectors, operationalised by measures of complex task intensity. Furthermore, we examine whether catch-up is slower in sectors with a large skill intensity, a high degree of export sophistication and high income elasticity. Employing Comtrade and UNIDO data between 1960 and 2000 covering manufacturing sectors, we find that catch-up is slower in more tacit knowledge intensive sectors, as well as in skill intensive and export sophisticated sectors. With more recent data from 1997 to 2011 from GTAP we find instead that catch-up is faster in more tacit knowledge intensive manufacturing sectors, whereas catch-up is slower in more tacit knowledge intensive services sectors. Catch-up is consistently faster in income elastic sectors, both for manufacturing and services.

Suggested Citation

  • Eddy Bekkers & Michael Landesmann & Indre Macskasi, 2017. "Trade in Services versus Trade in Manufactures: The Relation between the Role of Tacit Knowledge, the Scope for Catch up, and Income Elasticity," wiiw Working Papers 139, The Vienna Institute for International Economic Studies, wiiw.
    • Handle: RePEc:wii:wpaper:139
    as

    Download full text from publisher

    File URL: https://wiiw.ac.at/trade-in-services-versus-trade-in-manufactures-the-relation-between-the-role-of-tacit-knowledge-the-scope-for-catch-up-and-income-elasticity-dlp-4378.pdf
    Download Restriction: no
    ---><---

    References listed on IDEAS

    as
    1. Finicelli, Andrea & Pagano, Patrizio & Sbracia, Massimo, 2013. "Ricardian selection," Journal of International Economics, Elsevier, vol. 89(1), pages 96-109.
    2. Levchenko, Andrei A. & Zhang, Jing, 2016. "The evolution of comparative advantage: Measurement and welfare implications," Journal of Monetary Economics, Elsevier, vol. 78(C), pages 96-111.
    3. Mayer, Thierry & Zignago, Soledad, 2006. "Notes on CEPII’s distances measures," MPRA Paper 26469, University Library of Munich, Germany.
    4. Antonio Ciccone & Elias Papaioannou, 2010. "Estimating cross-industry cross-country models using benchmark industry characteristics," Economics Working Papers 1235, Department of Economics and Business, Universitat Pompeu Fabra, revised Jun 2016.
    5. Fagerberg, Jan & Mowery, David C. & Nelson, Richard R. (ed.), 2006. "The Oxford Handbook of Innovation," OUP Catalogue, Oxford University Press, number 9780199286805.
    6. Nicholas Bloom & Mirko Draca & John Van Reenen, 2016. "Trade Induced Technical Change? The Impact of Chinese Imports on Innovation, IT and Productivity," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 83(1), pages 87-117.
    7. Antonio Ciccone & Elias Papaioannou, 2023. "Estimating Cross-Industry Cross-Country Interaction Models Using Benchmark Industry Characteristics," The Economic Journal, Royal Economic Society, vol. 133(649), pages 130-158.
    8. de Sousa, José, 2012. "The currency union effect on trade is decreasing over time," Economics Letters, Elsevier, vol. 117(3), pages 917-920.
    9. Davide Consoli & Francesco Vona & Francesco Rentocchini, 2016. "That was then, this is now: skills and routinization in the 2000s," Industrial and Corporate Change, Oxford University Press and the Associazione ICC, vol. 25(5), pages 847-866.
    10. Igor Filatotchev & Xiaohui Liu & Trevor Buck & Mike Wright, 2009. "The export orientation and export performance of high-technology SMEs in emerging markets: The effects of knowledge transfer by returnee entrepreneurs," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 40(6), pages 1005-1021, August.
    11. Arnaud Costinot & Dave Donaldson & Ivana Komunjer, 2012. "What Goods Do Countries Trade? A Quantitative Exploration of Ricardo's Ideas," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 79(2), pages 581-608.
    12. Timothy J. Kehoe & Kim J. Ruhl & Joseph B. Steinberg, 2018. "Global Imbalances and Structural Change in the United States," Journal of Political Economy, University of Chicago Press, vol. 126(2), pages 761-796.
    13. Acemoglu, Daron & Autor, David, 2011. "Skills, Tasks and Technologies: Implications for Employment and Earnings," Handbook of Labor Economics, in: O. Ashenfelter & D. Card (ed.), Handbook of Labor Economics, edition 1, volume 4, chapter 12, pages 1043-1171, Elsevier.
    14. Sandra M. Leitner & Manuel Marcias & Daniel Mirza & Robert Stehrer & Roman Stöllinger, 2016. "The Future Development of EU Industry in a Global Context," wiiw Research Reports 409, The Vienna Institute for International Economic Studies, wiiw.
    15. Benhabib, Jess & Spiegel, Mark M., 1994. "The role of human capital in economic development evidence from aggregate cross-country data," Journal of Monetary Economics, Elsevier, vol. 34(2), pages 143-173, October.
    16. Oldenski, Lindsay, 2012. "Export Versus FDI and the Communication of Complex Information," Journal of International Economics, Elsevier, vol. 87(2), pages 312-322.
    17. Justin Caron & Thibault Fally & James R. Markusen, 2021. "International Trade Puzzles: A Solution Linking Production And Preferences," World Scientific Book Chapters, in: BROADENING TRADE THEORY Incorporating Market Realities into Traditional Models, chapter 11, pages 199-250, World Scientific Publishing Co. Pte. Ltd..
    18. Serge Shikher, 2012. "Putting industries into the Eaton--Kortum model," The Journal of International Trade & Economic Development, Taylor & Francis Journals, vol. 21(6), pages 807-837, November.
    19. Dowlinga, Malcolm & Cheang, Chia Tien, 2000. "Shifting comparative advantage in Asia: new tests of the "flying geese" model," Journal of Asian Economics, Elsevier, vol. 11(4), pages 443-463.
    20. A. Colin Cameron & Douglas L. Miller, 2015. "A Practitioner’s Guide to Cluster-Robust Inference," Journal of Human Resources, University of Wisconsin Press, vol. 50(2), pages 317-372.
    21. Wi Saeng Kim & Esmeralda Lyn & Edward Zychowicz, 2003. "Is the Source of FDI Important to Emerging Market Economies? Evidence from Japanese and U.S. FDI," Multinational Finance Journal, Multinational Finance Journal, vol. 7(3-4), pages 107-130, September.
    22. Allan M. Williams, 2007. "Listen to Me, Learn with Me: International Migration and Knowledge Transfer," British Journal of Industrial Relations, London School of Economics, vol. 45(2), pages 361-382, June.
    23. Meric S. Gertler, 2003. "Tacit knowledge and the economic geography of context, or The undefinable tacitness of being (there)," Journal of Economic Geography, Oxford University Press, vol. 3(1), pages 75-99, January.
    24. Peter Egger & Sergey K. Nigai, 2016. "World-Trade Growth Accounting," CESifo Working Paper Series 5831, CESifo.
    25. Fulvio Castellacci, 2011. "Closing the Technology Gap?," Review of Development Economics, Wiley Blackwell, vol. 15(1), pages 180-197, February.
    26. Hanoch, Giora, 1975. "Production and Demand Models with Direct or Indirect Implicit Additivity," Econometrica, Econometric Society, vol. 43(3), pages 395-419, May.
    27. Thibault Fally & Ana Cecilia Fieler & Justin Caron, 2017. "Home Market Effects on Innovation," 2017 Meeting Papers 609, Society for Economic Dynamics.
    28. Xu, Bin, 2000. "Multinational enterprises, technology diffusion, and host country productivity growth," Journal of Development Economics, Elsevier, vol. 62(2), pages 477-493, August.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Eddy Bekkers & Joseph F. Francois & Hugo Rojas†Romagosa, 2018. "Melting Ice Caps and the Economic Impact of Opening the Northern Sea Route," Economic Journal, Royal Economic Society, vol. 128(610), pages 1095-1127, May.
    2. Pothen, Frank & Hübler, Michael, 2018. "The interaction of climate and trade policy," European Economic Review, Elsevier, vol. 107(C), pages 1-26.
    3. Justin Caron & Thibault Fally & James Markusen, 2021. "Per capita income and the demand for skills," World Scientific Book Chapters, in: BROADENING TRADE THEORY Incorporating Market Realities into Traditional Models, chapter 12, pages 251-268, World Scientific Publishing Co. Pte. Ltd..
    4. Pothen, Frank & Hübler, Michael, 2017. "A Regional Trade Model with Ricardian Productivity Gains and Multi-technology Electricity Supply," Hannover Economic Papers (HEP) dp-585, Leibniz Universität Hannover, Wirtschaftswissenschaftliche Fakultät.
    5. Andrei A Levchenko & Jing Zhang, 2013. "The Global Labor Market Impact of Emerging Giants: A Quantitative Assessment," IMF Economic Review, Palgrave Macmillan;International Monetary Fund, vol. 61(3), pages 479-519, August.
    6. Levchenko, Andrei A. & Zhang, Jing, 2016. "The evolution of comparative advantage: Measurement and welfare implications," Journal of Monetary Economics, Elsevier, vol. 78(C), pages 96-111.
    7. Julian di Giovanni & Andrei A. Levchenko & Jing Zhang, 2014. "The Global Welfare Impact of China: Trade Integration and Technological Change," American Economic Journal: Macroeconomics, American Economic Association, vol. 6(3), pages 153-183, July.
    8. Logan T Lewis & Ryan Monarch & Michael Sposi & Jing Zhang, 2022. "Structural Change and Global Trade," Journal of the European Economic Association, European Economic Association, vol. 20(1), pages 476-512.
    9. Nelson Lind & Natalia Ramondo, 2023. "Trade with Correlation," American Economic Review, American Economic Association, vol. 113(2), pages 317-353, February.
    10. Brandt, Loren & Li, Bingjing & Morrow, Peter M., 2021. "Processing trade and costs of incomplete liberalization: The case of China," Journal of International Economics, Elsevier, vol. 131(C).
    11. Jing Zhang, 2013. "Global Welfare Impact of China: Trade Integration and Technology Change," 2013 Meeting Papers 630, Society for Economic Dynamics.
    12. Battisti, Michele & Gatto, Massimo Del & Parmeter, Christopher F., 2022. "Skill-biased technical change and labor market inefficiency," Journal of Economic Dynamics and Control, Elsevier, vol. 139(C).
    13. Bolatto, Stefano & Moramarco, Graziano, 2023. "Gains from trade and their quantification: Does sectoral disaggregation matter?," International Economics, Elsevier, vol. 174(C), pages 44-68.
    14. Costinot, Arnaud & Rodríguez-Clare, Andrés, 2014. "Trade Theory with Numbers: Quantifying the Consequences of Globalization," Handbook of International Economics, in: Gopinath, G. & Helpman, . & Rogoff, K. (ed.), Handbook of International Economics, edition 1, volume 4, chapter 0, pages 197-261, Elsevier.
    15. Rotunno, Lorenzo & Wood, Adrian, 2020. "Wage inequality and skill supplies in a globalised world," Journal of Comparative Economics, Elsevier, vol. 48(3), pages 529-547.
    16. Alviarez, Vanessa, 2019. "Multinational production and comparative advantage," Journal of International Economics, Elsevier, vol. 119(C), pages 1-54.
    17. Justin Caron & Thibault Fally, 2022. "Per Capita Income, Consumption Patterns, and CO2 Emissions," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 9(2), pages 235-271.
    18. Lorenzo Caliendo & Fernando Parro & Esteban Rossi-Hansberg & Pierre-Daniel Sarte, 2018. "The Impact of Regional and Sectoral Productivity Changes on the U.S. Economy," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 85(4), pages 2042-2096.
    19. Elisaveta Archanskaia & Guillaume Daudin, 2012. "Heterogeneity and the Distance Puzzle," Documents de Travail de l'OFCE 2012-17, Observatoire Francais des Conjonctures Economiques (OFCE).
    20. Andrei A. Levchenko & Jing Zhang, 2012. "Comparative advantage and the welfare impact of European integration [General equilibrium analysis of the Eaton–Kortum model of international trade]," Economic Policy, CEPR, CESifo, Sciences Po;CES;MSH, vol. 27(72), pages 567-602.

    More about this item

    Keywords

    sectoral TFP; tacit knowledge; technological catch-up;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • I25 - Health, Education, and Welfare - - Education - - - Education and Economic Development

    NEP fields

    This paper has been announced in the following NEP Reports:

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:wii:wpaper:139. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Customer service (email available below). General contact details of provider: https://edirc.repec.org/data/wiiwwat.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.