TY - JOUR
T1 - Technology adoption in follower countries
T2 - With or without local R & D activities?
AU - Todo, Yasuyuki
N1 - Funding Information:
KEYWORDS: technology adoption, local R&D activities, multinational enterprises, multiple steady states, switching regression ∗Faculty of Economics, Tokyo Metropolitan University, 1-1 Minami-Osawa, Hachioji, Tokyo 192-0397 Japan. E-mail: yastodo@comp.metro-u.ac.jp. Web: http://www.comp.metro-u.ac.jp/∼yastodo/. I would like to thank Naohito Abe, Taro Akiyama, Richard Braun, Shinichi Fukuda, Taiji Furusawa, Motonari Kurasawa, Takashi Kurosaki, Makoto Saito, Satoshi Shimizu-tani, Yasuyuki Sawada and seminar participants at the Applied Econometric Association conference in Singapore, the Japanese Economic Association annual meetings, the Economic and Social Research Institute (Japan), Hitotsubashi University, the University of Tokyo, and Yokohama National University for helpful comments and suggestions. I have also received valuable advice from one of the editors, Charles Jones, and two anonymous referees. Taichi Kobayashi, Kazuhiro Yoshioka, and Yu Yoshizumi provided excellent research assistance. Financial support from the Masayoshi Ohira Memorial Foundation, the Japan Society for the Promotion of Science, and the Ministry of Education, Culture, Sports, Science and Technology of Japan (the Grant-in-Aid for the 21st Century COE program “Microstructure and Mechanism Design in Financial Markets”) is gratefully acknowledged.
PY - 2005
Y1 - 2005
N2 - Technology adoption in follower countries can be accomplished by local R&D activities, but it can also be achieved without formal R&D, for example, by foreign direct investment. Empirical evidence suggests that current R&D activities often expand local knowledge for future R&D, while adoption without R&D does not seem to have this effect. We formalize this idea in a quality-ladder growth model and find that this biased externality results in multiple steady states: In the long run, countries with sufficient initial knowledge and human capital converge to a state in which R&D is locally undertaken and thus become relatively rich, while other countries fully rely on technology adoption without R&D and stay poor. Switching regression using cross-country data supports the presence of multiple steady states in R&D expenditures.
AB - Technology adoption in follower countries can be accomplished by local R&D activities, but it can also be achieved without formal R&D, for example, by foreign direct investment. Empirical evidence suggests that current R&D activities often expand local knowledge for future R&D, while adoption without R&D does not seem to have this effect. We formalize this idea in a quality-ladder growth model and find that this biased externality results in multiple steady states: In the long run, countries with sufficient initial knowledge and human capital converge to a state in which R&D is locally undertaken and thus become relatively rich, while other countries fully rely on technology adoption without R&D and stay poor. Switching regression using cross-country data supports the presence of multiple steady states in R&D expenditures.
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U2 - 10.2202/1534-5998.1249
DO - 10.2202/1534-5998.1249
M3 - Article
AN - SCOPUS:21244447042
SN - 1534-5998
VL - 5
JO - Topics in Macroeconomics
JF - Topics in Macroeconomics
IS - 1
ER -
