Can trade really hurt? An empirical follow-up on Samuelson's controversial paper

Jürgen Bitzer (), Holger Görg () and Philipp J.H. Schröder

Kiel Working Papers from Kiel Institute for the World Economy

Abstract: This paper investigates Samuelson's (JEP, 2004) argument that technical progress of the trade partner may hurt the home country. We illustrate this prospect in a simple Ricardian model for sitations with outward knowledge spillovers. Within this framework Samuelson's "Act II" effects may occur. Based on industry level panel data for seventeen OECD countries for the period 1973 to 2000 we show econometrically that the outflow of domestic knowledge via exports or FDI may have a negative impact on industry output in the home country. This is particularly so when exporting to technological less advanced oountries and, more specifically, China

Keywords: international R&D spillovers; outward foreign direct investment; export driven spillovers (search for similar items in EconPapers)
JEL-codes: F10 F11 F14 O30 (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-int
Date: 2008-09
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Working Paper: Can Trade Really Hurt? An Empirical Follow-up on Samuelson’s Controversial Paper
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Persistent link: http://EconPapers.repec.org/RePEc:kie:kieliw:1451

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