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Trade and diffusion of embodied technology: an empirical analysis

Author

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  • Ayerst, Stephen
  • Ibrahim, Faisal
  • MacKenzie, Gaelan
  • Rachapalli, Swapnika

Abstract

Using global patents, citations, inter-sectoral sales, and trade data, we examine the international diffusion of technology through imported inputs. We use citations and sales data to characterize knowledge and production input-output tables for individual countries. Using these tables, we construct a measure of the flow of knowledge-weighted and production-weighted technology embodied in inputs imported from the US. We develop an instrumental variable strategy to establish that increases in embodied technology imports lead to increased innovation and knowledge diffusion in sectors within importing countries. Effects are substantially larger for knowledge-weighted imports of embodied technology.

Suggested Citation

  • Ayerst, Stephen & Ibrahim, Faisal & MacKenzie, Gaelan & Rachapalli, Swapnika, 2023. "Trade and diffusion of embodied technology: an empirical analysis," Journal of Monetary Economics, Elsevier, vol. 137(C), pages 128-145.
    • Handle: RePEc:eee:moneco:v:137:y:2023:i:c:p:128-145
    DOI: 10.1016/j.jmoneco.2023.05.002
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    More about this item

    Keywords

    Research spillovers; Technology diffusion; Trade; Patents; Innovation;
    All these keywords.

    JEL classification:

    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • O19 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - International Linkages to Development; Role of International Organizations
    • F61 - International Economics - - Economic Impacts of Globalization - - - Microeconomic Impacts

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