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A Technology-gap Approach to Cumulative Growth -Toward an Integrated Model Empirical Evidence for Spain, 1960-1997

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  • Fulvio Castellacci

Abstract

The purpose of the present paper is to explore the possibility to compound in a unique formalization two different but complementary theories of technical change and macroeconomic growth, that is the Kaldorian idea of cumulative causation and the technology-gap approach to economic growth. . The main findings of the first three sections are: an higher rate of diffusion or creation of innovative activity in a country determines a higher and stable rate of productivity increase only if it is "sustained" by the technological characteristics of the system, by the prevailing type of investment of firms and by the distribution of the productivity increases between profit earners and wage perceivers. In other words, what matters for growth is not just innovation, accumulation or distribution, but their structural compatibility over time. Many different growth regimes are theoretically possible, but only some of them lead to a cumulative-technology-gap led growth. As a first experiment, the model has been empirically tested for the case of Spain in the period 1960-1997. The results of the estimations show that there has been a structural break with the transformation from a Kaldorian cumulative growth regime led by internal consumption, in the first period (1960-1975), to a technology-gap growth regime, in the second period (1982-1990). Hence, as a general conclusion for the case of Spain, the Kaldorian cumulative causation process and the technology-gap growth appear to be alternative rather than complementary explanations of economic growth. It is then necessary in future works to extend the empirical test of the model to a set of advanced countries, in order to investigate whether this conclusion is common to other countries, or rather it is peculiar to the evolution of the Spanish growth regime.

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  • Fulvio Castellacci, 2001. "A Technology-gap Approach to Cumulative Growth -Toward an Integrated Model Empirical Evidence for Spain, 1960-1997," DRUID Working Papers 01-04, DRUID, Copenhagen Business School, Department of Industrial Economics and Strategy/Aalborg University, Department of Business Studies.
    • Handle: RePEc:aal:abbswp:01-04
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    References listed on IDEAS

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    Cited by:

    1. Ali, Anesa & Pérez Caldentey, Esteban, 2007. "The comparative advantage fallacy and a rule for convergence," Revista CEPAL, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), December.
    2. Steven Cassou & Emanuel Xavier de Oliveira, 2011. "Barriers to technological adoption in Spain and Portugal," Portuguese Economic Journal, Springer;Instituto Superior de Economia e Gestao, vol. 10(3), pages 189-209, December.
    3. Patrick Llerena & André Lorentz, 2003. "Alternative Theories on Economic Growth and the Co-evolution of Macro-Dynamics and Technological Change: A survey," LEM Papers Series 2003/27, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.
    4. Patrick Llerena & André Lorentz, 2003. "Alternative Theories on Economic Growth and the Co-evolution of Macro-Dynamics and Technological Change: A survey," LEM Papers Series 2003/27, Laboratory of Economics and Management (LEM), Sant'Anna School of Advanced Studies, Pisa, Italy.

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    More about this item

    Keywords

    Cumulative growth; Innovation; Catching-up;
    All these keywords.

    JEL classification:

    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • O3 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights
    • O4 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity

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