A Model of Technology Gap, Product Cycle, and the Process of Catching Up between the North and the South.
The paper presents a multi-product two-country overlapping generations model of trade and innovation. The authors show that for a low level of innovation (imitation) in the South, firms in the North innovate at a level which guarantees a long-term technological gap between the North and the South. However, a high innovation level in the South leads to a situation where the South can catch up the North in a finite time. This model differs from the existing literature in two major aspects. (1) Except for the head start of the North they assume that the North and the South are identical with respect to factor endowment and their ability to develop new goods. (2) It is general enough to explain both the product cycle phenomena and catching-up process. Copyright 1991 by The Economic Society of Australia.
Year of publication: |
1991
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Authors: | Chou, Chien-Fu ; Shy, Oz |
Published in: |
The Economic Record. - Economic Society of Australia - ESA, ISSN 1475-4932. - Vol. 67.1991, 198, p. 217-26
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Publisher: |
Economic Society of Australia - ESA |
Saved in:
Saved in favorites
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