Technology Adoption in Follower Countries: With or Without Local R&D Activities?
Technology adoption in follower countries can be accomplished by local R&D activities, but it can also be achieved without formal R&D, for example, by foreign direct investment. Empirical evidence suggests that current R&D activities often expand local knowledge for future R&D, while adoption without R&D does not seem to have this effect. We formalize this idea in a quality-ladder growth model and find that this biased externality results in multiple steady states: In the long run, countries with sufficient initial knowledge and human capital converge to a state in which R&D is locally undertaken and thus become relatively rich, while other countries fully rely on technology adoption without R&D and stay poor. Switching regression using cross-country data supports the presence of multiple steady states in R&D expenditures.
Year of publication: |
2005
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Authors: | Yasuyuki, Todo |
Published in: |
The B.E. Journal of Macroeconomics. - De Gruyter, ISSN 1935-1690. - Vol. 5.2005, 1, p. 1-32
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Publisher: |
De Gruyter |
Saved in:
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