DP3711 North-South and South-South Trade-Related Technology Diffusion: An Industry Level Analysis

Author(s): Marcelo Olarreaga, Maurice Schiff, Yanling Wang
Publication Date: January 2003
Keyword(s): developing countries, technology diffusion, trade
JEL(s): F01
Programme Areas: International Trade and Regional Economics
Link to this Page: cepr.org/active/publications/discussion_papers/dp.php?dpno=3711

This Paper examines the impact on TFP of North-South and South-South trade-related R&D spillovers. It is the first, as far as we know, to do so at the industry level for developing countries. North-South and South-South R&D flows are constructed based on industry-specific R&D in the North, North-South and South-South trade patterns, and input-output relations in the South. The main findings are: i) North-South and South-South R&D flows have a positive impact on TFP, though the former is larger; and ii) R&D-intensive industries benefit mainly from North-South R&D flows while low R&D-intensity industries benefit mainly from South-South R&D flows. These results have implications for the productivity dynamics of North-South and South-South regional integration.