Productivity Growth in Backward Economies and the Role of Barriers to Technology Adoption

Hildegunn Stokke

Working Paper Series from Department of Economics, Norwegian University of Science and Technology

Abstract: We offer a barrier model of growth with a broader understanding of the sources of productivity growth. Organizational change is suggested as an alternative to innovation and technology adoption. Domestic and international barriers (related to the level of human capital and the trade share) determine the timing and pace of technological catch-up, and as opposed to the catchingup hypothesis backward economies may get stuck in a poverty trap. Growth in lagging economies is not driven by adoption of foreign technology due to inappropriateness. The large technological distance forces the economy to rely more on own productivity improvements through organizational change. Trade liberalization in backward economies does not give the expected boost to productivity growth, because of low capability to take advantage of the frontier technology. Economies can escape the poverty trap by reducing trade barriers, but the benefits from an open economy is highest in middle-income economies, which have both the potential and capability to adopt foreign technology.

Keywords: Ramsey-model; sources of growth; trade barriers; poverty trap (search for similar items in EconPapers)
JEL-codes: O3 O4 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2005-03-10
New Economics Papers: this item is included in nep-dev and nep-eff
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (4)

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Persistent link: https://EconPapers.repec.org/RePEc:nst:samfok:4905

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