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Trade-mediated biotechnology transfer and its effective absorption: an application to the U.S. forestry sector

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  • Das, Gouranga Gopal
  • Alavalapati, Janaki

Abstract

n this paper, we analyze the consequences of biotechnology innovations in the United States forest sector (logging) by modeling technology transfer embodied in trade flows and its absorption. A seven-region, seven-traded-commodity version of a dynamic computable general equilibrium model is used to achieve this task. A 0.63% Hicks-neutral biotechnological progress in the source region (U.S.) has differential impacts on the productivity of the log-using sectors in the domestic as well as in the recipient regions. Since recipient regions' ability to utilize biotechnology innovations depends on their absorptive capacity (AC) and structural similarity (SS), we construct the AC and SS indices based on multiplicity of factors such as human capital endowments, skill content and social appropriateness of the new innovations. The model results show that biotechnological innovations in the U.S. forest sector result in a significant increase in timber production. Following the productivity improvements and its embodied spillover, wood products and pulp and paper sectors in the U.S. register higher productivity growth. The role of AC and SS in capturing technical change is shown to be evident. In the face of growing regulations on timber production from public forests, increasing productivity through biotechnology may be the most effective way to meet the consumer demand for forest products.

Suggested Citation

  • Das, Gouranga Gopal & Alavalapati, Janaki, 2001. "Trade-mediated biotechnology transfer and its effective absorption: an application to the U.S. forestry sector," MPRA Paper 37254, University Library of Munich, Germany, revised 01 Feb 2002.
    • Handle: RePEc:pra:mprapa:37254
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    References listed on IDEAS

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    More about this item

    Keywords

    Total factor productivity; Dynamic computable general equilibrium; Capture parameter; Forestry biotechnology;
    All these keywords.

    JEL classification:

    • F18 - International Economics - - Trade - - - Trade and Environment
    • C68 - Mathematical and Quantitative Methods - - Mathematical Methods; Programming Models; Mathematical and Simulation Modeling - - - Computable General Equilibrium Models
    • N50 - Economic History - - Agriculture, Natural Resources, Environment and Extractive Industries - - - General, International, or Comparative
    • F17 - International Economics - - Trade - - - Trade Forecasting and Simulation
    • D58 - Microeconomics - - General Equilibrium and Disequilibrium - - - Computable and Other Applied General Equilibrium Models

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