The Regional Dimension of North-South Trade-Related R&D Spillovers

This paper examines the impact of trade with Japan, North America, and the European Union on technology diffusion and total factor productivity growth in Korea, Mexico, and Jordan. Measures of foreign research and development are constructed based on industry-specific research and development in the North, North-South trade patterns, and input-output relations in the South. The findings show that technology diffusion and productivity gains tend to be regional. Jordan benefits mainly from trade with the European Union, Korea from trade with Japan, and Mexico from trade with North America. In other words, the dynamic version of the âÃÂÃÂnatural trading partnersâÃÂàhypothesis holds for these countries.North-South Trade; R&D; Regional Spillovers

North-South Technology Spillovers: The Relative Impact of Openness and Foreign R&D

This paper examines the relative contribution of openness and the R&D content of trade to TFP growth for North-South trade-related technology diffusion. The measure of foreign R&D used in the literature on trade-related technology diffusion imposes identical contributions of openness and the R&D content of trade to TFP. We allow these contributions to differ and show that openness has a greater impact on TFP growth than R&D. These results imply that the impact of openness on TFP in developing countries is larger than previously obtained in this literature. In other words, developing countries can obtain larger productivity gains from trade liberalization than previously thought.technology diffusion, R&D, openness, North-South

North-South technology diffusion, regional integration, and the dynamics of the natural trading partners hypothesis

Based on static analysis, a number of studies argue that forming a regional trade agreement is more likely to raise welfare if member countries are"natural trading partners,"while other studies claim that the opposite is true. Schiff and Wang look at the argument from a dynamic viewpoint by examining the impact of North-South trade on technology diffusion and total factor productivity (TFP) in the South. Specifically, it examines the impact on TFP in the Republic of Korea, Mexico, and Poland of trade with Japan, Canada plus the United States (North America) and the European Union. Using industry-level data, they find that (1) technology diffusion and productivity gains tend to be regional: Korea benefits mainly from trade with Japan, Mexico with the United States, and Poland with the European Union; and (2) though these results suggest that the dynamic version of the"natural trading partners"hypothesis holds for all three countries, careful analysis shows that it holds for Korea and Mexico but not necessarily for Poland.Trade Policy,Environmental Economics&Policies,Earth Sciences&GIS,Economic Theory&Research,Water and Industry,TF054105-DONOR FUNDED OPERATION ADMINISTRATION FEE INCOME AND EXPENSE ACCOUNT,Environmental Economics&Policies,Economic Theory&Research,Trade and Regional Integration,Trade Policy

North-South Trade-Related Technology Diffusion: Virtuous Growth Cycles in Latin America

This paper examines the impact on TFP in Latin America and the Caribbean (LAC) and in other developing countries (DEV) of trade-related foreign R&D (NRD), education and governance. The measures of NRD are constructed based on industry-specific R&D in the North, North-South trade patterns, and input-output relations in the South. The main findings are: i) education and governance have a much larger direct effect on TFP in LAC than in DEV, while the opposite holds for the North's R&D; and ii) education and governance have an additional impact on TFP in R&D-intensive industries through their interaction with NRD in LAC but not in DEV. These interaction effects imply that increasing the level of any of the three policy variables – education, governance or openness – result in virtuous growth cycles. These are smallest under an increase in trade, education or governance, are stronger under an increase in two of these three policy variables, and are strongest under an increase in all three variables.trade, technology diffusion, growth, Latin America

Brain Drain and Productivity Growth: Are Small States Different?

This paper examines the impact of North-South trade-related technology diffusion on TFP growth in small and large states in the South. The main findings are: i) TFP growth increases with North-South trade-related technology diffusion, with education, and with the interaction between the two, and it decreases with the emigration of skilled labor (brain drain); ii) these effects are substantially (over three times) larger in small states than in large ones. Small states also exhibit a much higher brain drain level. Consequently, the brain drain generates greater losses in terms of TFP growth both because of its greater sensitivity to the brain drain and because the brain drain is substantially larger in small than in large states.trade, technology diffusion, brain drain, productivity growth

The Effects of Relativistic Corrections on Cosmological Parameter Estimations from SZE Cluster Surveys

Sunyaev-Zel'dovich Effect (SZE) cluster surveys are anticipated to yield tight constraints on cosmological parameters such as the equation of state of dark energy. In this paper, we study the impact of relativistic corrections of the thermal SZE on the cluster number counts expected from a cosmological model and thus, assuming that other cosmological parameters are known to high accuracies, on the determination of the $w$ parameter and $\sigma_8$ from a SZE cluster survey, where $w=p/\rho$ with $p$ the pressure and $\rho$ the density of dark energy, and $\sigma_8$ is the rms of the extrapolated linear density fluctuation smoothed over $8\hbox{Mpc}h^{-1}$. For the purpose of illustrating the effects of relativistic corrections, our analyses mainly focus on $\nu=353 \hbox{GHz}$ and $S_{lim}=30\hbox{mJy}$, where $\nu$ and $S_{lim}$ are the observing frequency and the flux limit of a survey, respectively. These observing parameters are relevant to the {\it Planck} survey. It is found that from two measurable quantities, the total number of SZE clusters and the number of clusters with redshift $z\ge 0.5$, $\sigma_8$ and $w$ can be determined to a level of $\pm 1$ and $\pm 8$, respectively, with $1\sigma$ uncertainties from a survey of $10000\hbox{deg}^2$. Relativistic effects are important in determining the central values of $\sigma_8$ and $w$. If we choose the two quantities calculated relativistically from the flat cosmological model with $\sigma_8=0.8284$ and $w=-0.75$ as input, the derived $\sigma_8$ and $w$ would be 0.819 and -0.81, respectively, if relativistic effects are wrongly neglected. The location of the resulting $\sigma_8$ and $w$ in the $\sigma_8-w$ plane is outside the $3\sigma$ region around the real central $\sigma_8$ and $w$.Comment: ApJ in pres

Regional integration and technology diffusion : the case of the North America free trade agreement

The literature on regional integration agreements (RIAs) is vast and deals with political, economic, and political economy issues. The literature on the economics of RIAs deals mostly with static effects, and concludes that these effects are, in general, ambiguous. So far there has been no empirical analysis of the dynamic effects of RIAs based on their impact on technology diffusion from partner and nonpartner countries. Schiff and Wang's paper is a firstattempt in this direction. The authors examine the impact of the North America Free Trade Agreement (NAFTA) on total factor productivity in Mexico through its impact on trade-related technology transfers from OECD countries. They estimate trade-related technology diffusion by using a measure of trade-related foreign research and development (R&D). Foreign R&D is constructed based on industry-specific R&D in the OECD, OECD-Mexico trade patterns, and input-output relations in Mexico. The authors find that: Mexico's trade with its NAFTA partners had a large and significant impact on Mexico's total factor productivity, while trade with the rest of the OECD did not. Simulating the impact of NAFTA has led to a permanent increase in total factor productivity in Mexico's manufacturing sector of between 5.5 percent and 7.5 percent and to some convergence with the economies of Canada and the United States.Environmental Economics&Policies,Water and Industry,Economic Theory&Research,Trade Policy,Agricultural Knowledge&Information Systems,Environmental Economics&Policies,Economic Theory&Research,TF054105-DONOR FUNDED OPERATION ADMINISTRATION FEE INCOME AND EXPENSE ACCOUNT,Trade and Regional Integration,Trade Policy

On the quantity and quality of knowledge - the impact of openness and foreign research and development on North-North and North-South technology spillovers

Knowledge accumulation means either new knowledge (an increase in its quality), greater access to existing knowledge (an increase in its quantity), or both. The authors examine the relative contribution of these two components of knowledge to total factor productivity (TFP) for North-North and North-South trade-related knowledge diffusion, with quantity, proxied by openness, and quality by the research and development (R&D) content of trade. The measure of foreign R&D used in the literature on trade-related knowledge diffusion, imposes equal contributions to TFP of openness, and of R&D content of trade. The authors'analysis show that R&D has a greater impact on TFP, than openness for North-North trade and, conversely, openness has a greater impact on TFP, than R&D for North-South trade. These results imply that the impact of openness on TFP in developing (industrial) countries is larger (smaller) than previously obtained in this literature, and that developing countries can obtain larger productivity gains from trade liberalization than previously thought.Scientific Research&Science Parks,Agricultural Knowledge&Information Systems,Economic Theory&Research,Environmental Economics&Policies,Public Health Promotion,Environmental Economics&Policies,Agricultural Knowledge&Information Systems,TF054105-DONOR FUNDED OPERATION ADMINISTRATION FEE INCOME AND EXPENSE ACCOUNT,Economic Theory&Research,Research and Development