Technology Diffusion, North-South Spillovers and Industrial Location

Arsene Rieber () and Thi Anh-Dao Tran ()
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Arsene Rieber: CARE, University of Rouen
Thi Anh-Dao Tran: CEPN, University of Paris XIII

Journal of Economic Development, 2002, vol. 27, issue 1, 25-39

Abstract: Relying on a model of economic geography, this paper discusses development opportunities arising from international trade and technology diffusion. We show that either import substitution or trade liberalization may trigger takeoff in the developing country, although these two policies work through different mechanisms. The industrialization process is also influenced by knowledge spillovers: strong international technology diffusion offers better prospects for the developing country to benefit from technological externalities provided abroad. Thus, one objective of the developing country should be to enhance its absorptive capacity in order to exploit these technological externalities. In this context, only import substitution trade policy seems to be successful in financing indigenous learning process. However, this result is strongly dependent on the effectiveness of budgetary resource allocation.

Date: 2002
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Persistent link: https://EconPapers.repec.org/RePEc:jed:journl:v:27:y:2002:i:1:p:25-39

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