Education, Governance, and Trade- and Distance-related Technology Diffusion: Accounting for the Latin America-East Asia TFP Gap, and the TFP Impact of South America’s Greater Distance to the North

Maurice Schiff and Yanling Wang

No 126, GLO Discussion Paper Series from Global Labor Organization (GLO)

Abstract: This paper examines the impact of education, governance and North-South trade- and distance-related technology diffusion on TFP in the South, focusing on South America (SA), Mexico, Latin America (LA) and East Asia for the 32-year period preceding the Great Recession (1976-2007) in a new model that integrates models of trade-related and distance-related international technology diffusion. Our model’s explanatory power is 38% (62%) greater than that of the main trade-related (distance-related) model. Findings are: i) TFP increases with education, trade, governance (ETG) and imports’ R&D content, and declines with distance to the North; ii) an increase in LA’s ETG to East Asia’s level raises LA’s TFP by some 100% and accounts for about 75% of its TFP gap with East Asia; iii) raising LA’s education to East Asia’s level has a larger impact on TFP and on the TFP gap than raising governance or openness; iv) the TFP impact on South America relative to Mexico due to its greater distance to US-Canada (Europe)(Japan) is −18.9 (−2.13) (−9.78)%, with an overall impact of −12.4%.

Keywords: Education; Governance; Trade; Distance; Technology Diffusion; Productivity Impact; Latin America; East Asia (search for similar items in EconPapers)
JEL-codes: F13 I25 O19 O47 (search for similar items in EconPapers)
Date: 2017
New Economics Papers: this item is included in nep-cta, nep-edu, nep-sea and nep-tid
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Working Paper: Education, Governance, and Trade- and Distance-Related Technology Diffusion: Accounting for the Latin America-East Asia TFP Gap, and the TFP Impact of South America's Greater Distance to the North (2017)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:glodps:126

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