Effects of Trade Policy on Technology Adoption and Investment

Arilton Teixeira ()

Brazilian Review of Econometrics, 2003, vol. 23, issue 1

Abstract: This paper studies the consequences of trade policy for the adoption of new technologies. It develops a dynamic international trade model with two sectors. Workers in manufacturing decide if new technologies are used, capital owners then choose investment. We analyze three different arrangements: free trade, tariffs, and quotas. In the model, free trade or low tariffs guarantee that the most productive technology available will be used. In contrast, under a quota or high tariffs the most productive technology available will not be used at all times. Further, in the latter case investment, capital-labor ratio and GDP per capita are smaller than in the former one.

Date: 2003
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Working Paper: Effects of Trade Policy on Technology Adoption and Investment (2000)
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Persistent link: https://EconPapers.repec.org/RePEc:sbe:breart:v:23:y:2003:i:1:a:2730

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