Share This Article:

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

Abstract Full-Text HTML Download Download as PDF (Size:216KB) PP. 80-88
DOI: 10.4236/me.2010.12008    4,437 Downloads   6,978 Views   Citations
Author(s)    Leave a comment


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.

Conflicts of Interest

The authors declare no conflicts of interest.

Cite this paper

G. Das, "How to Reap the Induced Technological Bonus? A Mechanism and Illustrative Implementation," Modern Economy, Vol. 1 No. 2, 2010, pp. 80-88. doi: 10.4236/me.2010.12008.


[1] W. Keller, “International Technology Diffusion.” Journal of Economic Literature (AEA), Vol. 42, No. 3, 2004, pp. 752-782.
[2] J. Eaton and S. Kortum, “Trade in Ideas: Patenting and Productivity in the OECD,” Journal of International Economics, Vol. 40, No. 3-4, 1996, pp. 251-278.
[3] J. Eaton and S. Kortum, “Engines of Growth: Domestic and Foreign Sources of Innovation,” Japan and the World Economy, Vol. 9, No. 2, 1997, pp. 235-259.
[4] D. T. Coe, E. Helpman and A. W. Hoffmaister, “North- South R&D Spillovers,” Economic Journal, Vol. 107, No. 440, 1997, pp. 134-149.
[5] D. T. Coe, E. Helpman and A. W. Hoffmaister, “International R&D Spillovers and Institutions,” IMF Working Paper WP/08/104, IMF, 2008, pp. 1-35.
[6] World Bank, “World Development Report 1998/9: Knowledge for Development,” New York, Oxford University Press, 1999.
[7] World Bank, “Global Economic Prospect 2008: Technology Diffusion in the Developing World,” Washington D.C., 2008.
[8] M. P. Connolly, “The Dual Nature of Trade: Measuring its Impact on Imitation and Growth,” Duke University Department of Economics Working Paper, Durham, North Carolina, No. 97-34, 1998, pp. 1-28.
[9] P. Guerrieri and C. Milana, “Changes and Trends in the world Trade in High-Technology Products,” Cambridge Journal of Economics, Vol. 19, No. 1, 1995, pp. 225-242.
[10] B. Hoekman and B. Javorcik, “Global Integration and Technology Transfer,” Palgrave MacMillan, New York, 2006.
[11] G. G. Das, “Absorptive Capacity and Structural Congruence: The Binding Constraints on Technology Transfer—An Analytical Survey of the Underlying Issues,” Korean Journal of Policy Studies, Vol. 15, No. 2, 2001, pp. 117-140.
[12] G. G. Das, “Trade, Technology and Human Capital: Stylised Facts and Quantitative Evidence,” World Economy, Vol. 25, No. 2, February 2002, pp. 257-281.
[13] G. G. Das, “Modeling Sectoral and Welfare Impacts of Information Technology Spillovers: A Tale of Two Souths,” Indian Journal of Economics and Business, Serial Publications, Vol. 7, No. 2, December 2008, pp. 195- 205.
[14] W. M. Cohen and D. A. Levinthal, “Absorptive Capacity: A New Perspective on Learning and Innovation,” Administrative Science Quarterly, Vol. 35, No. 1, March 1990, pp. 128-152.
[15] W. M. Cohen and D. A. Levinthal, “Innovation and Learning: The Two Faces of R&D,” Economic Journal, Vol. 99, No. 397, September 1989, pp. 569-596.
[16] R. R. Nelson and H. Pack, “The Asian Miracle and Modern Growth Theory,” Economic Journal, Vol. 109, No. 457, July 1999, pp. 416-436.
[17] R. E. Evenson and. L. E. Westphal, “Technological Change and Technology Strategy,” In: J. R. Behrman and T. N. Srinivasan Eds., Handbook of Development Economics, Vol. 3, Chapter 37, Elsevier Science, 1995, pp. 2209-2299.
[18] R. R. Nelson, “On Technological Capabilities and their Acquisition,” In: R. E. Evenson and G. Ranis Eds., Science and Technology, Lessons for Development Policy, Westview Special Studies in Science, Technology, and Public Policy, 1990, pp. 71-80.
[19] H. van Meijl and F. van Tongeren, “Trade, Technology Spillovers, and Food Production in China,” Weltwirtschaftliches Archiv, Vol. 134, No. 3, 1998, pp. 443- 449.
[20] G. G. Das, “Embodied Technology Transfer via International Trade and Disaggregation of Labour Payments by Skill Level: A Quantitative Analysis in GTAP Framework,” 3rd Annual GTAP Conference in Global Economic Analysis Jointly Organized, the Centre of Policy Studies, Monash University, Melbourne, Australia and the Centre for Global Trade Analysis, Purdue University, West Lafayette, June 2000, pp. 1-20.
[21] G. M. Grossman and E. Helpman, “Innovation and Growth in the Global Economy,” The MIT Press, Cambridge, 1991.
[22] R. E. Lucas Jr, “Making a Miracle,” Econometrica, Vol. 61, No. 2, March 1993, pp. 251-72.
[23] R. E. Lucas Jr, “On the Mechanics of Economic Development,” Journal of Monetary Economics, Vol. 22, No. 1, 1998, pp. 3-42.
[24] S. Kosempel, “Interaction between Knowledge and Technology: A Contribution to the Theory of Development,” Canadian Journal of Economics, Vol. 40, No. 4, 2007, pp. 1237-1260.
[25] P. Dasgupta, “A Matter of Trust: Social Capital and Economic Development,” Annual World Bank Conference in Development Economics (ABCDE), Seoul, May 2009, pp. 1-47.
[26] A. K. Sen, “Infrapoverty,” Meeting Presentation for Report: Making Infrastructure Work for the Poor, Japan-UNDP, UN, March 2006, pp. 1-6.
[27] D. Cetin and M. Cincera, “Mutual Dependence of R&D and Trade,” Working Paper, Joint Research Centre-IPTS, European Commission, and TED Conference Paper, Izmir, May 2010.
[28] R. Shankar and A. Shah, “Lessons from the European Union Policies for Regional Development,” The World Bank Policy Research Working Paper, WPS 4977, Washington DC, 2009, pp. 1-47.
[29] H. Pack and L. E. Westphal, “Industrial Strategy and Technological Change: Theory versus Reality,” Journal of Development Economics, Vol. 22, No. 1, 1986, pp. 87- 128.
[30] G. G. Das, “Trade, Endogenous Technology Capture and Induced Productivity: A Numerical Analysis,” Ride Journal of Economics and Business (Korean), Hanyang University, Ansan Campus, Seoul, Vol. 8, 2003, pp. 223-246.

comments powered by Disqus

Copyright © 2018 by authors and Scientific Research Publishing Inc.

Creative Commons License

This work and the related PDF file are licensed under a Creative Commons Attribution 4.0 International License.