Working Paper: NBER ID: w4926
Authors: Gene M. Grossman; Elhanan Helpman
Abstract: We survey research on the relationship between technology and trade. We begin with the old literature, which treated the state of technology as exogenous and asked how changes in technology affect the trade pattern and welfare. Recent research has attempted to endogenize technological progress which results either from learning- by-doing or from investments in research and development. This allows one to examine not only how technology affects trade, but also how trade affects the evolution of technology. We emphasize the parallels between the models with learning-by-doing and those with explicit R&D and highlight the role that the geographic extent of knowledge spillovers plays in mediating the relationship between trade and technological progress.
Keywords: Technology; Trade; International Economics
JEL Codes: F10; O30
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Technological disparities between countries (O57) | Pattern of international trade (F10) |
| Trade influences technological progress (O39) | Market opportunities and competitive pressures (L19) |
| Trade openness (F43) | Faster growth rates (O49) |
| Trade reinforces initial technological gaps (F12) | Cumulative advantages in technological development (O49) |