Technology and Bilateral Trade
Data
01.01.1997
01.01.1997
Autori
Jonathan Eaton, Samuel Kortum
Codice JEL
F11,F17,O33
F11,F17,O33
Parole chiave:
Trade,Gravity,Technology,Research,Integration
Trade,Gravity,Technology,Research,Integration
Publisher
Economy and Society
Economy and Society
Editor
Gianmarco I.P. Ottaviano
Gianmarco I.P. Ottaviano
We develop a Ricardian model to explore the role of trade in spreading the benefits of innovation. The theory delivers an equation for bilateral trade that, on its surface, resembles a gravity specification, but identifies underlying parameters of technology. We estimate the equation using trade in manufactures among the OECD. The parameter estimates allow us to simulate the model to investigate the role of trade in spreading the benefits of innovation and to examine the effects of lower trade barriers. Typically foreigners benefit by only a tenth as much as the innovating country, but in some cases the benefits to close neighbours approach those of the innovator.