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Neighbors and the evolution of the comparative advantage of nations: Evidence of international knowledge diffusion?

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  • Bahar, Dany
  • Hausmann, Ricardo
  • Hidalgo, Cesar A.

Abstract

The literature on knowledge diffusion shows that knowledge decays strongly with distance. In this paper we document that the probability that a product is added to a country's export basket is, on average, 65% larger if a neighboring country is a successful exporter of that same product. For existing products, growth of exports in a country is 1.5% higher per annum if it has a neighbor with comparative advantage in these products. While these results could be driven by a common third factor that escapes our controls, they align with our expectations of the localized character of knowledge diffusion.

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  • Bahar, Dany & Hausmann, Ricardo & Hidalgo, Cesar A., 2014. "Neighbors and the evolution of the comparative advantage of nations: Evidence of international knowledge diffusion?," Journal of International Economics, Elsevier, vol. 92(1), pages 111-123.
    • Handle: RePEc:eee:inecon:v:92:y:2014:i:1:p:111-123
    DOI: 10.1016/j.jinteco.2013.11.001
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    More about this item

    Keywords

    Export similarity; Productivity; Knowledge; Technology; Diffusion; Spillovers;
    All these keywords.

    JEL classification:

    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • F10 - International Economics - - Trade - - - General

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