Trade liberalization, democratization, and technology adoption

Matteo Cervellati, Alireza Naghavi and Farid Toubal

Journal of Economic Growth, 2018, vol. 23, issue 2, No 1, 145-173

Abstract: Abstract A general equilibrium theory with heterogeneous skills predicts a complementarity between trade and democracy in creating demand for superior technologies. Trade liberalization or democratization alone may lead to vested interests that limit technology adoption. We use panel data on technology adoption, at a disaggregated level, for the period 1980–2000. Exploiting within-country variation over time and the heterogeneous timing of trade liberalization and democratization, we document a significant and sizable positive interaction between trade openness and democratization for technology adoption. The result that transitions to open democracies are beneficial for technological dynamics is robust to a large set of checks.

Keywords: Trade liberalization; Democratization; Political economy theory; Technology adoption; Disaggregated panel data; Within country variation (search for similar items in EconPapers)
JEL-codes: F16 F59 J24 O14 P51 (search for similar items in EconPapers)
Date: 2018
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Citations: View citations in EconPapers (19)

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Related works:
Working Paper: Trade Liberalization, Democratization and Technology Adoption (2014)
Working Paper: Trade Liberalization, Democratization and Technology Adoption (2013)
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DOI: 10.1007/s10887-018-9155-5

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