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Technology gaps, trade and income

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  • Sampson, Thomas

Abstract

This paper quantifies the contribution of technology gaps to international income inequality. I develop an endogenous growth model where cross-country differences in R&D efficiency and cross-industry differences in innovation and adoption opportunities together determine equilibrium technology gaps, trade patterns and income inequality. Countries with higher R&D efficiency are richer and have comparative advantage in more innovation-dependent industries. I calibrate R&D efficiency by country and innovation-dependence by industry using R&D, patent and bilateral trade data. Counterfactual analysis implies technology gaps account for one-quarter to one-third of nominal wage variation within the OECD.

Suggested Citation

  • Sampson, Thomas, 2023. "Technology gaps, trade and income," LSE Research Online Documents on Economics 117370, London School of Economics and Political Science, LSE Library.
    • Handle: RePEc:ehl:lserod:117370
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    Cited by:

    1. Angenendt, David & Bokhari, Farasat & Mariusso, Franco & Zhang, Junjun, 2024. "A Comment on Sampson (2023)," I4R Discussion Paper Series 114, The Institute for Replication (I4R).
    2. 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.
    3. Jörg Mayer, 2021. "Development strategies for middle‐income countries in a digital world—Insights from modern trade economics," The World Economy, Wiley Blackwell, vol. 44(9), pages 2515-2546, September.
    4. 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.
    5. 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.

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    More about this item

    Keywords

    technology gaps; development accounting; comparative advantage; innovation; technology diffusion; endogenous growth;
    All these keywords.

    JEL classification:

    • F14 - International Economics - - Trade - - - Empirical Studies of Trade
    • D31 - Microeconomics - - Distribution - - - Personal Income and Wealth Distribution
    • D24 - Microeconomics - - Production and Organizations - - - Production; Cost; Capital; Capital, Total Factor, and Multifactor Productivity; Capacity
    • O31 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Innovation and Invention: Processes and Incentives
    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • O47 - Economic Development, Innovation, Technological Change, and Growth - - Economic Growth and Aggregate Productivity - - - Empirical Studies of Economic Growth; Aggregate Productivity; Cross-Country Output Convergence

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