Economic growth, leadership and capital flows: the leapfrogging effect

Elise Brezis () and Daniel Tsiddon

The Journal of International Trade & Economic Development, 1998, vol. 7, issue 3, 261-277

Abstract: The leapfrogging effect has been analysed in a model without capital. However, history has shown numerous cases in which countries lost economic leadership at the same time as they were exporting capital. This work focuses on the interaction between international capital flows, economic growth and the transmission of leadership. We show that capital mobility is at the heart of the adoption of new technologies. Malfunctioning international capital markets that prevent capital imports may delay adoption of the new technology by the lagging country and may postpone or even prevent leapfrogging that would have occurred in the case of free flows of capital. The model shows that capital mobility smooths passing the baton in the relay race for economic leadership.

Keywords: Growth; international capital flows; leadership; leapfrogging; learning-by-doing; technological progress (search for similar items in EconPapers)
Date: 1998
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Citations: View citations in EconPapers (9)

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DOI: 10.1080/09638199800000014

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