North-South technology diffusion, regional integration, and the dynamics of the “natural trading partners” hypothesis

Maurice Schiff and Yanling Wang

Revue d’économie du développement, 2007, vol. 15, issue 5, 69-84

Abstract: Based on static analysis, a number of studies argue that forming a regional trade agreement (RTA) is more likely to raise welfare if member countries are ?natural trading partners,? while other studies claim the opposite. This paper considers the argument from a dynamic viewpoint by examining the impact of trade with Japan, North America and the EU on technology diffusion and total factor productivity (TFP) in Jordan, Korea and Mexico. Using industry-level data, we show that: i) technology diffusion and productivity gains tend to be regional: Jordan, Korea, and Mexico tend to benefit mainly from trade with the EU, Japan, and North America respectively; and ii) the dynamic version of the ?natural trading partners? hypothesis seems to hold. JEL Classification: F02, F13, F15, F43, O39

Keywords: North-South technology diffusion; productivity; regional integration; natural trading partners; Korea; Mexico (search for similar items in EconPapers)
JEL-codes: F02 F13 F15 F43 O39 (search for similar items in EconPapers)
Date: 2007
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Citations: View citations in EconPapers (2)

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Related works:
Working Paper: North-South Technology Diffusion, Regional Integration, and the Dynamics of the “Natural Trading Partners” Hypothesis (2004)
Working Paper: North-South technology diffusion, regional integration, and the dynamics of the natural trading partners hypothesis (2004)
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