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The effect of technological innovation on international trade

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  • Márquez-Ramos, Laura
  • Martínez-Zarzoso, Inmaculada

Abstract

In this paper, the effect of technological innovation on sectoral exports is analysed using a gravity model of trade. The technological achievement index (TAI) and its four components, creation of technology, diffusion of old innovations, diffusion of recent innovations and human skills, are used as proxies for technological innovation. The two first components are considered proxies for knowledge acquisition and assimilation (potential absorptive capacity), whereas the last two are taken as proxies for knowledge transformation and exploitation (realised absorptive capacity). We hypothesise that the effect of technological innovation on trade could vary according to the technological achievement by generating a non-linear relationship between technological innovation and trade. Our findings indicate a positive and non-linear effect of technological innovation on export performance, which indicates that there are thresholds for positive signs to occur. To foster exports, countries have to consider not only acquisition and assimilation capabilities, but also transformation and exploitation capabilities once a minimum level of potential absorptive capacity has been achieved.

Suggested Citation

  • Márquez-Ramos, Laura & Martínez-Zarzoso, Inmaculada, 2010. "The effect of technological innovation on international trade," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 4, pages 1-37.
  • Handle: RePEc:zbw:ifweej:201011
    DOI: 10.5018/economics-ejournal.ja.2010-11
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    Cited by:

    1. Wei, Aiping & Zakari, Abdulrasheed & Tawiah, Vincent & Aleesa, Noha, 2024. "Cultivating resilient economies through responsible mineral resource trade: Does eco-resourcing rebate matter?," Resources Policy, Elsevier, vol. 89(C).
    2. Petra Adelajda Zaninoviæ, 2022. "Do ICT and technological development facilitate supply chain trade?," Zbornik radova Ekonomskog fakulteta u Rijeci/Proceedings of Rijeka Faculty of Economics, University of Rijeka, Faculty of Economics and Business, vol. 40(2), pages 313-327.
    3. Márquez-Ramos, Laura & Martínez-Zarzoso, Inmaculada & Suárez-Burguet, Celestino, 2012. "Trade policy versus trade facilitation: An application using good old OLS," Economics - The Open-Access, Open-Assessment E-Journal (2007-2020), Kiel Institute for the World Economy (IfW Kiel), vol. 6, pages 1-38.
    4. Muhammad Asghar & Imran Sharif Chaudhry & Sharafat Ali, 2024. "Innovation, Energy Consumption and Trade Dynamic: Evidence from Developed and Developing Countries," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 15(1), pages 4356-4382, March.
    5. Mokthtari Moughari, Mahdieh & Daim, Tugrul U., 2023. "Developing a model of technological innovation for export development in developing countries," Technology in Society, Elsevier, vol. 75(C).

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    More about this item

    Keywords

    Technological innovation; international trade; gravity model; potential and realised absorptive capacity;
    All these keywords.

    JEL classification:

    • F10 - International Economics - - Trade - - - General

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