The role of the technology and innovation gap in Polish trade relations. Empirical verification with the use of trade gravity approach

Tomasz Brodzicki and Katarzyna Śledziewska

No 1506, Working Papers from Instytut Rozwoju, Institute for Development

Abstract: The technology gap theory as advocated by Posner (1961) described an advantage enjoyed by a country that introduces new goods into a market, gaining an initial edge and establishing its initial exporter status. The nexus between technology and innovation gap and trade is however much more complex. The goal of this paper is to investigate the actual role of technology and innovation gap in explaining intensity of bilateral trade flows of Poland with its trade partners at the general (country level) with the use of trade gravity approach. The analysis is carried out for 234 trade partners of Poland in the period 1999-2013. Technology gap is measured by TFP and relative patenting performance controlling for quality of institutions as well as technology and innovation indices of Global Competitiveness Report by the WEF (2014). In order to obtain unbiased results we utilize semi-mixed effects model using Poisson pseudo-maximum likelihood (PPML) estimator.

Keywords: technology; gap trade gravity; semi-mixed effect panel model (search for similar items in EconPapers)
JEL-codes: C23 F10 F14 F15 (search for similar items in EconPapers)
Pages: 23 pages
Date: 2015-08
New Economics Papers: this item is included in nep-ino, nep-int and nep-tra
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http://www.instytut-rozwoju.org/WP/IR_WP2015_06.pdf First version, 2015

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Persistent link: https://EconPapers.repec.org/RePEc:iro:wpaper:1506

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