Virtual integration and endogenous growth in the world economy

Toru Kikuchi

International Advances in Economic Research, 2004, vol. 10, issue 4, 289-296

Abstract: This study develops a three-country model of endogenous growth that captures the role of the interconnection of country-specific communications networks (i.e., virtual integration), which affects the productivity of R&D activity through an increase in stock of knowledge capital. The number of countries connected to internationally interconnected networks is found to determine the structure of dynamic comparative advantages. That is, countries with interconnected networks have a dynamic comparative advantage in differentiated products that require communication and activities. In the connected countries, researchers gain from efficient activity through the utilization of the greater stock of knowledge capital. Copyright International Atlantic Economic Society 2004

Date: 2004
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DOI: 10.1007/BF02295142

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