North–South Trade-Related Technology Diffusion and the East Asia–Latin America Productivity Gap

Maurice Schiff and Yanling Wang

World Trade Review, 2023, vol. 22, issue 3-4, 348-358

Abstract: This paper examines the impact of trade-related technology diffusion from G7 countries to Latin America and East Asia on total factor productivity controlling for education, governance, and distance. We build on the trade and distance-focused strands of the technology diffusion literature and find that (i) total factor productivity (TFP) increases with education, trade, and governance (ETG) and declines with distance to the G7 countries; (ii) increasing Latin America's ETG to East Asia's level would double TFP, accounting for about 75% of the TFP gap between the two country groups; and (iii) South America's greater remoteness relative to Mexico's from the US and Canada significantly reduces its TFP and similarly for Singapore's greater remoteness from Japan relative to Hong Kong.

Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:cup:wotrrv:v:22:y:2023:i:3-4:p:348-358_6

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