Winner-Take-All Contention of Innovation under Globalization: A Simulation Analysis and East Asia's Empirics

Ishido Hikari and Okamoto Yusuke

No 53, IDE Discussion Papers from Institute of Developing Economies, Japan External Trade Organization(JETRO)

Abstract: This paper sets out to examine how innovation enhances export competitiveness: The proposition that export volume becomes enhanced as more productivity-enhancing innovation is captured by the exporting economy is the focus of this study. From a Schumpeterian perspective, innovation can be characterized by continuous creation and subsequent diffusion of newer technologies on the basis of the exporters' existing capital stock. Then we highlight the theoretical possibility that concentration of innovative activities in a small group of "winner" economies would lead to larger shares of "winner" economies' exports of innovation-active commodities than those commodities for which technology involved is already mature. The world's export data corroborates this theoretical prediction overall, and a focus upon East Asia has revealed the region's increasing resort to technology-intensive commodity sectors, which has presumably been enabled through attracting technology-bearing inward foreign direct investment. Considering the overall gains from innovation, acceleration of full "cycle" of innovation and imitation might be a desirable option.

Keywords: Concentration and diffusion of innovation; Industrialization; Technological innovations; Globalization; International trade; International competition; Exports; East Asia; Southeast Asia; 工業化; 技術革新; グローバリゼーション; 貿易; 国際競争力; 輸出; 東アジア; 東南アジア (search for similar items in EconPapers)
JEL-codes: F12 L25 O31 O33 (search for similar items in EconPapers)
Date: 2006-03-01
New Economics Papers: this item is included in nep-int and nep-sea
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Published in IDE Discussion Paper = IDE Discussion Paper, No. 53. 2006-03-01

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