Technology and economic inequality effects on international trade

Inés Granda and Antonio Fonfría
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Inés Granda: Universidad Complutense de Madrid, Facultad de Ciencias Económicas y Empresariales
Antonio Fonfría: Universidad Complutense de Madrid, Facultad de Ciencias Económicas y Empresariales

No 902, Working Papers del Instituto Complutense de Estudios Internacionales from Universidad Complutense de Madrid, Instituto Complutense de Estudios Internacionales

Abstract: The notion that technology plays a key role in explaining trade performed was supported in the last decades by many empirical studies. In this paper we use a different perspective trying to analyse the effects of technology and economic inequalities on international trade inequalities. The theoretical framework where we built our empirical analysis is the technological gap aproach. We considered eight European countries and 13 manufacture industries in the time period 1995-2002. We made a panel data model with a cross-sectional unit of analysis: the Euclidean distance among countries in each industry. We considered the Euclidian distance as a proxy of inequality among countries in each industry. We observed that technology and economic inequalities affect trade inequality and that the effect depends on the technological contend of each industry.

Keywords: Technology inequality; trade inequality; Euclidean distance; technological contend. (search for similar items in EconPapers)
Pages: 26 pages
Date: 2009
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