| I examine the effects of international trade and technology spillovers on economic growth and welfare. In doing so, I propose a process innovation model without scale effects by reformulating existing endogenous growth models such as Jones (1995) and Segerstrom's (1998). The earliest line of knowledge-based endogenous growth model exhibits scale effects. However, empirical evidence does not support these scale effects. Thus a number of efforts have made to construct alternatives without scale effects and Jones' and Segerstrom's are the examples. In their models, innovations lead to new monopolistically competitive intermediate goods. In my model, I replace this notion of product innovation with the one of process innovation. Thus there is an intermediate good and innovations make it more productive. By doing so, I find that long-run growth rate is completely determined by the exogenous parameters. This means that economic growth does not depend on structural characteristics of the economy, and thus government policy and consumers preferences are powerless in determining economic growth.;In international version of this model, I focus on the diffusion of technology embodied in imported foreign intermediate goods. In this model, countries trade intermediate goods, which causes technology diffusion between countries because of the public good properties of technology. Thus, higher economic growth in one economy leads to higher growth in the other. From this research, I obtain additional interesting results. First, in contrast to previous literatures, trade liberalization and technology spillovers, do not always increase the economic growth of less developed countries. Second, with international trade each country's long run growth rate converges to a worldwide growth rate. Third, trade liberalization might cause technological leapfrogging.;In empirical part, I use panel data including 21 industrial countries and 82 less developed countries over the 1970--1995 period. The empirical results show that the effects of international R&D spillovers on growth in both ICs and LDCs are substantial. These effects are stronger, the more opened a country is to foreign trade or the more educated its labor force is. In addition, there is global-upward trend in the effect of international R&D spillovers over time. |
