Publication: North-South Technology Diffusion, Regional Integration, and the Dynamics of the Natural Trading Partners Hypothesis
Date
2004-10
ISSN
Published
2004-10
Author(s)
Schiff, Maurice
Wang, Yanling
Abstract
Based on static analysis, a number of
studies argue that forming a regional trade agreement is
more likely to raise welfare if member countries are
"natural trading partners," while other studies
claim that the opposite is true. Schiff and Wang look at the
argument from a dynamic viewpoint by examining the impact of
North-South trade on technology diffusion and total factor
productivity (TFP) in the South. Specifically, it examines
the impact on TFP in the Republic of Korea, Mexico, and
Poland of trade with Japan, Canada plus the United States
(North America) and the European Union. Using industry-level
data, they find that (1) technology diffusion and
productivity gains tend to be regional: Korea benefits
mainly from trade with Japan, Mexico with the United States,
and Poland with the European Union; and (2) though these
results suggest that the dynamic version of the
"natural trading partners" hypothesis holds for
all three countries, careful analysis shows that it holds
for Korea and Mexico but not necessarily for Poland.
Link to Data Set
Citation
“Schiff, Maurice; Wang, Yanling. 2004. North-South Technology Diffusion, Regional Integration, and the Dynamics of the Natural Trading Partners Hypothesis. Policy Research Working Paper;No.3434. © World Bank, Washington, D.C.. http://hdl.handle.net/10986/14237 License: CC BY 3.0 IGO.”
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