We analyze the role of vertical innovation in trade patterns for developing economies trading with technologically advanced countries. A model is presented where the international diffusion of knowledge, promoted by economic integration, is the source of a technological catching up and leads to a convergence in the quality of traded goods, with a positive effect on exports. We then turn our attention on the evolution of trade between the Central and Eastern European countries (CEECs-5) and their European Union partner countries, assessing whether economic integration has increase the quality of the goods produced. For the period 1995-2005, we find evidence of the increasing role of intra-industry trade and vertical differentiation and a process of specialization in higher quality products, especially in the medium- and high-skill sectors. © International Atlantic Economic Society 2008.
Vertical innovation and catching-up: Implications of EU integration for CEECs-5 / Cavallaro, Eleonora; Marcella, Mulino. - In: INTERNATIONAL ADVANCES IN ECONOMIC RESEARCH. - ISSN 1083-0898. - STAMPA. - 14:3(2008), pp. 265-279. [10.1007/s11294-008-9160-0]
Vertical innovation and catching-up: Implications of EU integration for CEECs-5
CAVALLARO, Eleonora;
2008
Abstract
We analyze the role of vertical innovation in trade patterns for developing economies trading with technologically advanced countries. A model is presented where the international diffusion of knowledge, promoted by economic integration, is the source of a technological catching up and leads to a convergence in the quality of traded goods, with a positive effect on exports. We then turn our attention on the evolution of trade between the Central and Eastern European countries (CEECs-5) and their European Union partner countries, assessing whether economic integration has increase the quality of the goods produced. For the period 1995-2005, we find evidence of the increasing role of intra-industry trade and vertical differentiation and a process of specialization in higher quality products, especially in the medium- and high-skill sectors. © International Atlantic Economic Society 2008.I documenti in IRIS sono protetti da copyright e tutti i diritti sono riservati, salvo diversa indicazione.