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Technology adoption and factor proportions in open economies : theory and evidence from the global computer industry

Author:	Cusolito , Ana P.; Lederman, Daniel;	Collection Title:	Policy Research working paper ; no. WPS 5043
Country:	World;	Date Stored:	2009/09/09
Document Date:	2009/09/01	Document Type:	Policy Research Working Paper
Language:	English	Major Sector:	Industry and trade
Rel. Proj ID:	1W-Trade Quality -- -- P113810;	Region:	The World Region
Report Number:	WPS5043	Sub Sectors:	General industry and trade sector
SubTopics:	Economic Theory & Research; Labor Policies; Technology Industry; E-Business; ICT Policy and Strategies	Volume No:	1 of 1

Summary: Theories of international trade assume that all countries use similar and exogenous technologies in the production of any good. This paper relaxes this assumption. The marriage of literatures on biased technical change and trade yields a tractable theory, which predicts that differences in factor endowments and intellectual property rights bias technical change toward particular factor intensities, and thus unit factor input requirements can vary across economies. Using data on net exports of a single industry, computers, intellectual property rights and factor endowments for 73 countries during 1980-2000, the paper shows that once technological choices are considered, countries with different factor endowments can become net exporters of the same product.


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