Why Growth Rate Differences Persist. International Technology Diffusion in the Long Run

This thesis discusses the question of how and to what extent international technology diffusion affects labour productivity growth differences between countries in the long run. The author carries out empirical analyses using insights from different views in the economic growth literature (economic history, growth accounting methods and endogenous growth theory). One conclusion is that the international transfer of institutions for human capital and research might have been more important for long run comparative economic performance than technology diffusion itself. It also suggests that these transfers take more time to diffuse than the direct technology transfer. The institutions are adjusted to the local technology system and innovation system. The technology system is characterised by factor proportions and market conditions. The innovation system consists of local institutions and organisations involved in innovation and absorption of foreign technology. These local systems change only over a long period of time. Secondly, the own R&D efforts of a country with a backlog in productivity have a positive impact on the speed of absorption of technology from a productivity leader, conditional on the international differences in technology systems and innovation system. Without R&D efforts, the distance of followers to the productivity leader will increase. At the same time it appears that without a change in the technology system and innovation system, the growth differences with the productivity leader will persist. Finally it appears that for some industries, the absorption of industry purpose technology is affected positively by own R&D efforts. For other industries, R&D investment rather increases the speed of absorption of general purpose technology. Here a properly working national innovation system is a crucial condition.