Learning by Doing, the Technology Gap, and Growth

In contrast with other trade and growth theories in previous literature, The author resents a growth theory of trade-induced learning: other things being equal, two conditions are essential for trade-induced learning. First, both exports and imports are equally important sources and are mutually reinforced in intensifying the learning process. Moreover, the nature or characteristics of these traded goods also influence the effect of learning. Second, trade openness is a prerequisite but not a sufficient condition for rapid growth. With whom one trades (one's trading partner) is a key factor in determining trade-induced technology spillover and hence in affecting enduring growth. Therefore, this trade-induced learning theory provides abundant and testable implications for the empirical study of trade and growth. Copyright 1998 by Economics Department of the University of Pennsylvania and the Osaka University Institute of Social and Economic Research Association.