Working Paper: CEPR ID: DP2525
Authors: Giorgio Barba Navaretti; Marzio Galeotti; Andrea Mattozzi
Abstract: This paper examines the link between imported technologies and a country?s export performance, as measured by product quality. The analysis is set against the background of the process of regional integration between the EU and its neighbouring developing countries. The underlying question is whether trade integration fosters or dampens learning and technological upgrading. We find that unit values of exports from these countries to the EU rose steadily between 1988 and 1996, relative to the unit values of world exports to Europe. If increases in unit values satisfactorily proxy increases in product quality, then trade integration has fostered product upgrading and technological learning in the sample countries. We find that imported technologies and other sources of knowledge have a strong bearing on this pattern. Technological inflows are captured by the degree of involvement of European companies in export flows from our sample countries (Outward Processing Trade) and by the skill content of the machines imported.
Keywords: export performance; regional integration; technology imports; textile industry
JEL Codes: F10; O10; O30
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| imported technologies (O33) | export performance (F17) |
| trade integration (F15) | product quality (L15) |
| complexity of machines (L63) | product quality (L15) |
| higher skill-intensive imports (F14) | unit value of exports (F10) |
| FDI (F23) | export performance (F17) |
| outward processing trade (F13) | product quality (L15) |