Technological effects of intra-OECD trade in manufacturing: A panel data analysis over the period 1988-2008

Javad Abedini

OECD Journal: Economic Studies, 2014, vol. 2013, issue 1, 165-177

Abstract: This article seeks to study how intra-OECD trade in manufacturing goods has affected technological heterogeneity across member states during 1988-2008. To this aim, we derive a panel data version of the Eaton and Kortum (2002) normalised trade model to estimate, annually, the technological heterogeneity of OECD countries. We find a gradual technological convergence across the group as the sensitivity of intra-group trade to price factors increases over time. However, the results diverge when considering European and non-European OECD sub-samples, separately. We find that technological convergence is not an automatic result of intra-group trade but, for that, a more general programme of economic liberalisation, including free movement of capital and labour, is also required.

JEL-codes: F13 F15 F33 (search for similar items in EconPapers)
Date: 2014
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