Title: Re-examining International Technological-Knowledge Diffusion
Author: Afonso, Oscar; Vasconcelos, Paulo B.
Author Affiliation: Faculdade de Economia do Porto and CEMPRE - Centro de Estudos Macroeconomicos e Previsao, Porto, Portugal; Faculdade de Economia de Economia do Porto and CMUP - Centro de Matematica da Universidade do Porto, Porto, Portugal
Source: International Economic Journal, June 2007, v. 21, no. 2, pp. 279-296
Publication Date: June 2007
Abstract: In the standard models of North-South technological-knowledge diffusion, the larger the initial technological-knowledge gap between contries is, the higher the Southern catching up. However, this result does not adjust well to Southern reality as a whole. The purpose of this paper is to demonstrate that the disparity between the theoretical outcome and the empirical findings can be reduced by considering that: (i) the South can only imitate Northern technological knowledge when it is sufficiently close to the Northern frontier; (ii) the advantage of the South's moderate backwardness, together with its imitation capacity, is a mechanism of catching up with the North; and (iii) the Southern catching-up specification can be country specifc. In particular, we show that the behavior of the South's relative level of employed human capital affects Southern imitation capacity and depends on the catching-up specifications.

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