International Trade, R & D Spillovers And The Productivity Change In Developing Countries

Theoretically, a developing country can directly improve its total factor productivity by investing in R&D, or it can indirectly boost its productivity by international trade, which can be considered as a channel of gaining R&D spillovers from the developed countries. Recently, a number of empirical studies proved the effect of R&D spillovers. International trade has been considered as a "highway of learning" for LDCs. However, only a few developing countries have observed rapid technological change and full industrialized country status in globalization. How will the international trade affect the productivity in developing countries has not been explained clearly, although much attention has been paid in this area. Hence, this thesis mainly focuses on the relationship between the international trade and productivity change in developing countries. It also makes some extensions to the existing literatures.According to the two different driving forces behind the endogenous technological progress, this thesis examines the effects of international trade and innovations in developing countries by theoretical approach. Particularly, bounding learning, pattern of international specializing and the dynamic change of industry-labor structure are combined with our analysis of endogenous technological change in developing countries. This thesis indicates that developing countries may face the trade-off between the current gains from trade—the existing comparative advantage, and the future benefit from the potential dynamic comparative advantage. In addition, large population, strong learning effects, low imitation cost and the appropriate imitation of technology may improve the technological change and lead to the convergence of economy.To investigate the effects of export and trade patterns, the article modifies the current measurement method of international R&D spillovers, and re-examines the export-output share in the empirical model. Based on the empirical studies of the relationship between international trade and industrial productivity change in China, this thesis originally makes an explicit measurement and a detailed decomposition of Malmquist Productivity Index of 34 industries of China during the period of 1996-2007. Finally, based on the empirical results in this thesis, it not only affirms the contribution of domestic R&D accumulation and international R&D spillovers, but also suggests the negative productivity effects of export activities.