How to Reap the Induced Technological Bonus? A Mechanism and Illustrative Implementation

Gouranga G. Das

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DOI: 10.4236/me.2010.12008                

Abstract

Exogenous technical progress can have uneven impacts on productivity contingent on absorptive capacity, structural congruence and trade intensity. The paper illustrates the role of enabling behind-the-border factors for effective absorption and is pertinent for discussing issues like ‘Europe 2020’or Lisbon strategy for inclusive growth. Drawing on our model, we illustrate that the capture-parameter is the propellant force for effective assimilation of foreign technology of recent vintage. The capture parameter is the outcome of endogenous decision-making process. The ‘productivity bonus’ mechanism leaves room for changing the results via skill-mix composition. However, it awaits implementation in a large-scale economy-wide modeling framework for further extension.

Keywords

Trade, Technology Spillover, Capture, Productivity, Congruence

Conflicts of Interest

The authors declare no conflicts of interest.

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