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Technological Convergence and International Trade

Dan Ben-David ()

No 1359, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: This paper builds on earlier evidence showing that, while most countries exhibit little evidence of unconditional income convergence, countries that trade heavily with one another tend to exhibit a much higher incidence of convergence. Two alternative explanations for the trade-related convergence are explored here. The first alternative is that the trade-related income convergence is due to a convergence in capital-labour ratios. Little support is found for this explanation. The other alternative examined here is that of a trade-related convergence in technologies. This alternative is corroborated by a high incidence of convergence in total factor productivities among countries that trade heavily with one another – an outcome that is not common between these same countries when they are grouped randomly rather than on the basis of trade.

Keywords: Income Convergence; International Trade; Technology; TFP (search for similar items in EconPapers)
JEL-codes: C22 O1 O5 (search for similar items in EconPapers)
Date: 1996-03
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Working Paper: Technological Convergence and International Trade (1996) Downloads
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