Technology Gaps, Trade and Income

Thomas Sampson

No 13799, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: This paper studies the origins and consequences of international technology gaps. I develop an endogenous growth model where R&D efficiency varies across countries and productivity differences emerge from firm-level technology investments. The theory characterizes how innovation and learning determine technology gaps, trade and global income inequality. Countries with higher R&D efficiency are richer and have comparative advantage in more innovation-dependent industries where the advantage of backwardness is lower and knowledge spillovers are more localized. I estimate R&D efficiency by country and innovation-dependence by industry from R&D and bilateral trade data. Calibrating the model implies technology gaps, due to cross-country differences in R&D efficiency, account for around one-quarter to one-third of nominal wage variation within the OECD.

Keywords: Technology gaps; Trade; Technology investment; Ricardian comparative advantage; International wage inequality (search for similar items in EconPapers)
JEL-codes: F11 F43 O14 O41 (search for similar items in EconPapers)
Date: 2019-06
New Economics Papers: this item is included in nep-cse, nep-gro, nep-int and nep-tid
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Related works:
Journal Article: Technology Gaps, Trade, and Income (2023)
Working Paper: Technology gaps, trade and income (2023)
Working Paper: Technology gaps, trade and income (2019)
Working Paper: Technology Gaps, Trade and Income (2019)
Working Paper: Technology gaps, trade and income (2019)
Working Paper: Technology gaps, trade and income (2019)
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