Technological Gap, Innovation Path and Economic Catching-up
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| Title | Technological Gap, Innovation Path and Economic Catching-up
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| Author | Fu Xiaoxia and Wu Lixue |
| Organization | Central University of Finance and Economics; Chinese Academy of Social Sciences |
| Email | fuxiaoxia77@163.com; wulixue@sina.com |
| Key Words | Technological Gap;Innovation Path; R&D Efficiency; Economic Growth |
| Abstract | This paper develops an endogenous technological progress model based on the late-coming economy with advantages of backwardness, in which both domestic innovations and technological imports are essential for the productivity improvement. The main results of the model are: 1) the growth rate of the follower will converge to that of the leader, but the equilibrium difference of income level depends on the former’s R&D efficiency, household preference and the production structure; 2) the evolution of income disparity between the developing and developed economy rests heavily on the change of technological gap rather than that of capital stock per efficiency labor; 3) the technological progress path in the lagging country, especially the relationship between the innovations and simulations, will decide the R&D structure choice; 4) the low technological level will bring down the real interest rate and do harm to the capital accumulation in the less-developed economy, by inducing a relative high capital level per efficiency labor; 5) the equilibrium intensity of R&D is related to not only the technological gap but also the profits of innovations, so the growth rate of follower’s productivity will overshoot from the bottom at first and then converge to the steady state. |
| Serial Number | WP459 |
| Time | 2013-06-26 |
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