“Geography, International Trade and Technological Diffusion”

This paper investigates the impact of geography on technological diffusion via international trade and proposes to re-examine the contribution of Coe, Helpman and Hoffmaister to the knowledge spillovers literature. Using a gravitational model, we first confirm the negative effect of physical distance on imports. We also show that geographic proximity contributes to more technological diffusion generated by imports. However, a decreasing technological diffusion effect is observed over time. A 1 percent increase in imports from European G6 countries generates, via technological diffusion, a mean increase of TFP by 1.3 percent for Mediterranean countries and 0.9 percent for MENA countries during the period 1982-1988, whereas technological diffusion effects on TFP are no more significant for the period 1989-1995. JEL Classification: F,