Essays on technological progress, economic growth, and international trade

This thesis explores a number of connections between technological progress, economic growth, and international trade. In the first chapter, using a highly disaggregated data set of trade flows into the United States, we construct a direct and independent measure of technological improvements for each country, over time, based on the number of new product varieties exported to the United States. We show, in a panel data setting, that acquiring the technological capacity for producing new products stimulates more rapid capital accumulation in developing countries, even after holding fixed the rate of TFP growth. We provide a model to demonstrate how an expansion in the technological capacity for producing additional products can lead to more rapid factor accumulation, without necessarily improving measured total factor productivity. Our findings suggest that while rapid accumulation of physical and human capital may have characterized the East Asian growth experience, these gains were stimulated by stellar improvements in technological capacity.; The second chapter of this thesis develops a model of technology transfer in an environment where firms in developing countries are unable to recover the costs of imitation and adaptation, because a competitive market structure in the South rules out any monopoly rents accruing to Southern firms. In such an environment, the technology transfer must be initiated by a Northern firm which risks its technology being copied widely throughout the South because of lower production costs in the South and because its markets in the North are protected by strong intellectual property rights or by natural means. The results demonstrate why reducing the explicit costs of technology transfer faced by Northern firms should be a key policy objective for developing countries faced with such an environment. Furthermore, the results suggest (in contrast to the previous work) that in such an environment, developing countries do not experience the endogenous increase in their relative wages from accumulating resources or improving labor productivity.; The diffusion of technology from advanced to lagging economies is facilitated by international trade. Thus, we ought to observe a greater incidence of income convergence among groups of countries closely related by international trade. Ben-David (1996) finds that this is indeed the case. The third chapter of this thesis asks two related questions. First, is there a greater incidence of convergence among groups of countries closely related by international trade? Second, can the apparent finding of a greater incidence of convergence among trade-related groups of countries be alternatively explained by a failure to control for steady-state levels of income? The results suggest that the answer to the first question is inconclusive and that the answer to the second question is affirmative.