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Technology gaps, trade and income

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  • Thomas Sampson

Abstract

This paper studies the origins and consequences of international technology gaps. I develop an endogenous growth model where R&D efficiency varies across countries and productivity differences emerge from firm-level technology investments. The theory characterizes how innovation and learning determine technology gaps, trade and global income inequality. Countries with higher R&D efficiency are richer and have comparative advantage in more innovation-dependent industries where the advantage of backwardness is lower and knowledge spillovers are more localized. I estimate R&D efficiency by country and innovation-dependence by industry from R&D and bilateral trade data. Calibrating the model implies technology gaps, due to cross-country differences in R&D efficiency, account for around one-quarter to one-third of nominal wage variation within the OECD.

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  • Thomas Sampson, 2019. "Technology gaps, trade and income," CEP Discussion Papers dp1627, Centre for Economic Performance, LSE.
    • Handle: RePEc:cep:cepdps:dp1627
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    Cited by:

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    2. Angenendt, David & Bokhari, Farasat & Mariusso, Franco & Zhang, Junjun, 2024. "A Comment on Sampson (2023)," I4R Discussion Paper Series 114, The Institute for Replication (I4R).
    3. Zhixin Zeng & Xiaojun Wang, 2023. "Will World Cultural Heritage Sites Boost Economic Growth? Evidence from Chinese Cities," Sustainability, MDPI, vol. 15(10), pages 1-19, May.
    4. Hamid Sepehrdoust & Mohsen Tartar & Razieh Davarikish, 2021. "Does Scientific Productivity Stimulate Intensified Technology Exports in Developing Economies," Journal of the Knowledge Economy, Springer;Portland International Center for Management of Engineering and Technology (PICMET), vol. 12(4), pages 2111-2135, December.
    5. 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.

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    More about this item

    Keywords

    technology gaps; trade; technology investment; Ricardian comparative advantage; international income inequality;
    All these keywords.

    JEL classification:

    • F11 - International Economics - - Trade - - - Neoclassical Models of Trade
    • F43 - International Economics - - Macroeconomic Aspects of International Trade and Finance - - - Economic Growth of Open Economies
    • O14 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Industrialization; Manufacturing and Service Industries; Choice of Technology
    • O41 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - One, Two, and Multisector Growth Models

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