Global knowledge and trade flows: Theory and measurement

Nelson Lind and Natalia Ramondo

Journal of International Economics, 2024, vol. 151, issue C

Abstract: We present a model of trade, global innovation, and diffusion, inspired by Eaton and Kortum (1999). The specific structure for innovation and diffusion we propose, which leverages general results developed in our previous work (Lind and Ramondo, 2023a), allows us to measure the flow of ideas across countries and over time. By deriving tractable expressions for productivity and expenditure, we can use easily-available international trade data to estimate both innovation and diffusion rates across countries and over time. We find that, although innovation is correlated with economic growth, there are many high income countries that primarily produce using diffused ideas from foreign sources.

Keywords: Innovation; Diffusion; International trade; Poisson processes; Fréchet distribution; Generalized extreme value (search for similar items in EconPapers)
JEL-codes: F1 O3 O4 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:inecon:v:151:y:2024:i:c:s0022199624000874

DOI: 10.1016/j.jinteco.2024.103960

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