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Why Doesn't Technology Flow from Rich to Poor Countries?

Author

Listed:
  • Juan Sanchez

    (Federal Reserve Bank of St. Louis)

  • Jeremy Greenwood

    (University of Pennsylvania)

  • Harold Cole

    (University of Pennsylvania)

Abstract

What determines the choice of technology within a country? While there could be many factors, the efficiency of the country's financial system may play a significant role. To address this question, a dynamic contract model is embedded into a general equilibrium setting with ompetitive intermediation. The ability of an intermediary to monitor and control the cash flows of a firm plays an important role in the decision to underwrite technology adoption. Can such a theory help to explain the differences in TFP and establishment-size distributions between India, Mexico and the U.S.? Some applied analysis suggests that answer is yes.

Suggested Citation

  • Juan Sanchez & Jeremy Greenwood & Harold Cole, 2012. "Why Doesn't Technology Flow from Rich to Poor Countries?," 2012 Meeting Papers 834, Society for Economic Dynamics.
    • Handle: RePEc:red:sed012:834
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    References listed on IDEAS

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    More about this item

    JEL classification:

    • D92 - Microeconomics - - Micro-Based Behavioral Economics - - - Intertemporal Firm Choice, Investment, Capacity, and Financing
    • E13 - Macroeconomics and Monetary Economics - - General Aggregative Models - - - Neoclassical
    • G24 - Financial Economics - - Financial Institutions and Services - - - Investment Banking; Venture Capital; Brokerage
    • O11 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Macroeconomic Analyses of Economic Development
    • O16 - Economic Development, Innovation, Technological Change, and Growth - - Economic Development - - - Financial Markets; Saving and Capital Investment; Corporate Finance and Governance

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