Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/171033 
Year of Publication: 
2017
Series/Report no.: 
IZA Discussion Papers No. 11049
Publisher: 
Institute of Labor Economics (IZA), Bonn
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%.
Subjects: 
education
governance
trade
distance
technology diffusion
productivity impact
Latin America
East Asia
JEL: 
F13
I25
O19
O47
Document Type: 
Working Paper

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