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Technological Progress Through Trade Liberalization in Transition Countries

Author

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  • Kandogan, Yener

    (School of Management, University of Michigan-Flint)

Abstract

Liberalization increases competitive pressures on domestic firms, creating incentives for reducing costs of production through technological progress. Through this channel, backward countries get a chance to narrow the technological gap with advanced countries. In this paper, the case of transition countries is analyzed. A model of oligopolistic firms’ strategic decision on R&D is developed to motivate the empirical analysis. The results suggest that initial conditions on size of the gap, and openness, as well as the stage of the market reforms, in particular, rate of liberalization and structure of markets are important factors in narrowing the technology gap.

Suggested Citation

  • Kandogan, Yener, 2004. "Technological Progress Through Trade Liberalization in Transition Countries," Journal of Economic Integration, Center for Economic Integration, Sejong University, vol. 19, pages 704-725.
    • Handle: RePEc:ris:integr:0286
    as

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    More about this item

    Keywords

    Technology gap; Trade Liberalization; Transition; Market reforms;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes

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